Can I get credit after bankruptcy?

Clients always ask me whether they can get credit after bankruptcy.

Yes you can. However it really helps to have a plan.

Remember, credit is frequently what got you into bankruptcy in the first place.  Credit should be treated with the same care as fire.  Under control, it is a great tool.  Out of control, it is an instrument of destruction.

Once you file a bankruptcy case, your existing debts will be discharged.  So shortly after bankruptcy, order a credit report to be sure that the reporting agencies are showing that your old debts are zero – discharged in bankruptcy.  Yes, the bankruptcy will be on your credit report for 10 years.  But each passing year will lead to better and better credit scores for you.  And pre-bankrutpcy scores will be the lowest you will encounter if you follow these tips:

• Pay your bills on time – utilities, cell phones, everything.
• If you have an installment loan on a car which you reaffirmed at bankruptcy, pay that bill on time, every time. 
• If you have problems paying bills, use automatic debit from your checking account to be sure that your bills are paid on time.
• Get one small credit card, maybe a gasoline card or a small secured credit card.  Use it sparingly and don’t carry it in your pocket.  Put it away when you are not using it for a planned purchase.  And then pay that bill on time, every time.

If you follow these steps, you will be on the road to restoring your credit within a year or two of filing your bankruptcy case.  It won’t be a perfect 850 FICO score, but it will improve rapidly and within 3-4 years of bankruptcy, your credit score should be much more respectable.

You can get credit after bankruptcy.  But you must act responsibly.