This is the number one question I get asked whenever a client visits me. Most of them have been told, incorrectly, that they will never get credit again and they are worried about that. The truth is, you will be able to get credit cards, car loans, mortgages, etc. even if you filed for bankruptcy.
Bankruptcy can stay on your credit report for ten years, but the older your bankruptcy case is, the better your chances for credit are. If you successfully complete your Chapter 7 or Chapter 13, those debts will be eliminated from your credit report (though it will state they were discharged in bankruptcy), so your credit score will increase slightly within months after your discharge. Also, within about six months from your discharge, you will get credit card applications in the mail, though you will be paying a higher interest rate than normal. But if you get a low balance credit card, something you can pay off each month, you can use this card to increase your credit score. Simply pay the balance off each month and on time; this good payment history will be reported on your credit report.
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There are many ways to use your credit cards wisely to help improve your credit score. If you have a cell phone that you pay by check each month, use your credit card to pay your cell phone bill, then use the that cash to pay the credit card. The same goes for gas for your car; put a tank of gas on your card, then pay the card off.
If you are looking for a car loan, you will also pay a higher interest rate than normal, but you can still get a car loan. It will depend on your job status and your credit score. the longer you wait to purchase a car after bankruptcy, the lower the interest rate you will be charged. If you are looking for a mortgage, you may have to wait until two years from your discharge date in order to qualify for an FHA loan.
If you have a mortgage, car loan, or even utility payments, keep those payments current and pay them on time. Most of the time, these payments are reported on your credit report and if you keep them current and on time they will be reported to the credit reporting bureaus and will help rebuild your credit score.
If you are worried about future credit if you file bankruptcy, don't let those fears decide for you whether to file bankruptcy or not. Chances are if you are contemplating bankruptcy, your credit score is low. Short of winning the lottery and being able to pay off all your debts, your credit score will remain low. So, bankruptcy may actually help you increase your credit score and improve your chances for future credit.
Don't be afraid of the myths of bankruptcy. Call your Detroit bankruptcy Lawyers at (586) 439-4297 for a free consultation and we will answer all of your questions and tell you the truth about bankruptcy.
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