We often get questions regarding the following issues:
1) After bankruptcy, will I be able to get credit?
2) How long will I have to wait until I get new credit?
The New York Times recently ran an informative article on this issue and we intend to provide it to our clients in the future.
You will very likely be able to get new credit after your bankruptcy if you are able to afford to pay the bills. The waiting time varies - some people may qualify for new credit immediately after receiving a discharge, others may have to dedicate more time to rebuilding their credit. Whether you can get credit immediately will depend on your overall financial situation.
Of course, we advise everyone to make do as best as possible without using credit. The interest rate and terms of the loan will likely be less favorable than the lender's "best rates," but credit is available. Generally, when people come into our office, they would most likely be unable to obtain credit for necessary life purchases at that time because of missed payments or an unmanageable debt load, so bankruptcy ultimately improves their standing.
The New York Times points out the following guidelines for new home loans:
FHA Loan = 1 year after Chapter 13 completion or 2 years after Chapter 7 discharge
Fannie Mae / Freddie Mac Loan = 2-4 year waiting period
Rebuilding cannot start until after bankruptcy. We generally see people filing after struggling for years with an unmanageable debt load, and these good intentions unfortunately delay their recovery by many years. Waiting until one's income improves can also lead to situations where the court demands a repayment of debts that otherwise would have simply been discharged.
Call us today at 650.259.9200 to set up a free consultation if you would like to discuss a potential filing.
Request a Consult or Call Back Online, or Call Us at 650.259.9200
Law Office of Jason Honaker