Yes, You Can Repair Your Credit After Bankruptcy
Sept. 29, 2022
While filing for bankruptcy can be an effective way to eliminate some of your debts and obtain a sense of financial freedom, the downside of filing for bankruptcy is that it will tarnish your credit score.
Bankruptcy can leave a negative mark on your credit report for up to 10 years. However, contrary to popular belief, bankruptcy will not ruin your credit forever. Fortunately, it is possible to rebuild your credit if you take the right steps and are willing to put some effort into it.
Our team at The Orantes Law Firm helps debtors understand what they can do to repair their credit after bankruptcy. We proudly serve clients throughout Los Angeles County and Orange County, including Los Angeles, Irvine, and Woodland Hills.
How Long Do Bankruptcies
Stay on Your Credit Report?
Before we list the specific steps you can take to repair your credit after bankruptcy, let’s discuss how long a bankruptcy can stay on your credit report. A bankruptcy can remain on your credit report for a specific number of years before it gets removed. The number of years depends on the type, or “Chapter,” of the bankruptcy:
Chapter 7 bankruptcy. If you file for Chapter 7 bankruptcy, the bankruptcy will typically stay on your credit report for 10 years.
Chapter 13 bankruptcy. If you file for bankruptcy under Chapter 13, the bankruptcy will typically stay on your credit report for seven years.
In both cases, the removal of the bankruptcy from your credit report is automatic. However, just because bankruptcy stays on your credit report for 7-10 years does not mean that there is nothing you can do to start rebuilding your credit while waiting. Below we will discuss the specific steps you can take to repair your credit after bankruptcy.
Does That Mean You Cannot Do Anything Requiring Credit for 7-10 Years?
Not at all. Often, debtors may be able to purchase a house just one or two years after a Chapter 13 discharge. If you want to purchase a car, it may be possible to get a car loan within about six months of the discharge.
If you file for Chapter 7 bankruptcy, it may be possible to buy a house about two to four years after the discharge of your case. If you need a car, you may be able to buy one upon the discharge of your Chapter 7 bankruptcy, which typically occurs four months from the filing date.
What Steps Can You Take
to Rebuild Credit?
Rebuilding your credit after bankruptcy can take some time and patience. If you want to repair your credit, these steps can help:
Always make timely payments on existing credit cards and loans. Keeping up with your existing payments can have a tremendous impact on your credit score.
Apply for a new line of credit. You can repair your credit after bankruptcy by applying for a new line of credit and demonstrating that you can make payments on time, every time. Consider applying for loans with a co-signer to increase your chances of approval.
Avoid job hopping. While jumping from job to job in a relatively short time does not directly affect your credit score, lenders may view job hopping as a potential risk because it may be an indication that you do not have a reliable income.
Keep a close eye on your credit reports. Examine your credit reports from Experian, Equifax, and TransUnion to ensure that the reports contain accurate and complete information and are free of errors.
For further guidance on how to repair your credit after bankruptcy, consider contacting The Orantes Law Firm. Our team will examine your unique situation and help you understand what else you can do to rebuild your credit.
Get a Trusted Attorney for Legal Help
It is definitely possible to repair your credit after bankruptcy. However, rebuilding your credit after bankruptcy may take patience, effort, and time. If you want to learn more about how to repair your credit and get your financial life back on track, consider contacting our bankruptcy attorney at The Orantes Law Firm. If you’re located in Los Angeles County or Orange County, reach out to our office today to get legal help and guidance you can trust.