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Restoring Your Credit Following Bankruptcy

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The goal in bankruptcy is to have your debts discharged. Your discharge will remain on your credit report for 10 years. However, you can rebuild your credit in two to four years. During this time, you will receive offers for credit cards and car loans from lenders because you are determined to be a good risk. Following a bankruptcy discharge, creditors know you have few debts and you can’t file for bankruptcy for eight years.

When banks lend, they examine your last two years of credit history. After your bankruptcy discharge focus on obtaining new credit by opening three new accounts that you can pay on time for 24 months. If you plan to buy a car be sure you can afford it. Coming out of bankruptcy, you will be charged a high interest rate so buy a cheap car that can last for two years; you can trade it in once your credit improves.

I advise most clients to open three new credit card accounts, or two accounts and a car loan, and to pay the balance every month to avoid the high interest rates. Do not incur debts and carry a balance. If you can do this for 24 months, you can restore your credit and then consider buying a home or buying a car at a good interest rate. After bankruptcy, with careful monitoring of your spending, you are able to restore your credit much sooner than you would assume.

If you’d like to learn more, I offer a free consultation. I can be reached by filling out the contact form on our website or by calling our office at 1-877-332-8369.

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Pittsburgh, PA 15232

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