Credit is Possible After Bankruptcy
The right time to go bankrupt is when you have assets to protect but find yourself financially stuck. Chapter 7 is the most common type and can only be used once in eight years.
Bankruptcy doesn't necessarily mean that you will be refused credit forever. The history of a bankruptcy stays on your credit history for ten years, yet it is possible for you to rebuild your credit in just a few years.
If you take steps after bankruptcy and manage your credit responsibly a good credit score can be regained. Begin rebuilding your credit by setting up a budget, pay all of your bills on time, get a secured credit card, or vehicle loan, and do not take on any new debt. In Chapter 7 the bankruptcy court forgives most debts that are not secured by assets or property (such as your house or car). Some assets are exempt. A court appointed trustee will take possession of you non-exempt property and will make arrangements to liquidate it, as well as taking responsibility for paying off debt with the proceeds. Not all debts can be erased by bankruptcy. *If you are facing financial problems, see a bankruptcy attorney for advice before moving forward.
There are two kinds of bankruptcy - Chapter 7 or Chapter 13.
Chapter 13 bankruptcy may be right for you if the court determines you have the income to repay your debts. Filing for Chapter 13 bankruptcy allows you to pay your debts in installments over a certain time period, usually three to five years. If a plan can be agreed upon, the court will grant your plan to repay the money you owe. People who want to keep certain assets, such as a house or car, turn to Chapter 13.
