While most bankruptcy
clients promise themselves that they will never again have or
use a credit card, some consider keeping at least one of their
old cards for convenience or emergencies after their bankruptcy
is over. In fact, there is usually no reason for you to
retain any of your old credit cards through your bankruptcy.
Most people receive unsolicited credit cards soon after
they file bankruptcy. Bankruptcy debtors receive new credit
cards because they are a better credit risk after wiping out
their debts in bankruptcythan they were when they owed money
to many creditors. Also, bankruptcy clients cannot file
against newly issued credit cards for eight years. For
most people, bankruptcy makes it easier, not harder, to get
new credit cards.
As soon as you receive
your bankruptcy discharge, you will be able to qualify for some
basic consumer loans, although at a higher interest rate.
The good news is most lenders state that it takes no more than
two years to reestablish a normal credit rating provided you
pay debts currently and make sufficient income. Within
two years after receiving a Chapter 7 discharge, most people
are able to purchase cars and homes with normal interest rates
and terms.
At one time bankruptcy
destroyed peoples' credit. Banks used to believe personal
bankruptcy was a stigma on credit that a debtor could not overcome.
Today, so many people file bankruptcy every year that
banks cannot ignore this large market of potential customers.
As a result, banks are much more lenient toward people
forced into bankruptcy. While no one plans to file bankruptcy,
the effect of filing today is not nearly as bad as your creditors
would like you to believe.
