Without a doubt, the most frequently asked question that I hear is, “Will I be able to get credit after bankruptcy?” Not only is the answer absolutely yes, the fact is that it has never been easier or quicker to reestablish credit after filing a bankruptcy. Since I started filing bankruptcy cases in 1986, I have seen the credit restoration period shrink from about 10 years for getting houses, and about five or six years for getting cars nearly 20 years ago, to about two years to get a decent mortgage interest rate on house loans and about a year to a year-and-a-half for cars. While it used to be necessary to get a secured credit card after filing a bankruptcy, this is no longer the case. My clients continue to receive unsolicited, pre-approved credit card applications in the mail after filing their bankruptcy cases.
You may not believe this, but …
Many people look at me with shock and disbelief when I tell them that the first thing I recommend that they do after filing a bankruptcy is to get a brand new MasterCard or Visa card. The purpose of using the card is rather special and limited. For the most part, I recommend operating on a cash available basis after filing a bankruptcy. What this means is if you have the ability to pay for something, which means “to have the cash available”, then and only then should you purchase it. However, you still need to reestablish credit. If you were to ignore the fact that credit is a major part of American society today and continue to operate on a cash basis, you’d probably never be able to reestablish credit to the point where you would be able to borrow any meaningful sum of money. Which would keep you from ever buying a house or car, since not too many people can pay cash for these things. So, you need to reestablish your credit.
The reason I recommend you obtain a MasterCard or Visa card is because these cards report every month to Experian, Equifax, and Trans Union; the Big Three credit reporting bureaus in this country. If you’ll keep using them, but in small amounts, then your regular on-time payments will be reported. Your on time payment record, more than anything else, will reestablish your credit in a short time. In fact, I have people calling me up on a regular basis telling me that they were able to obtain a good interest rate on a mortgage loan in less than two years after their bankruptcy.
In years past, I recommended that my clients pay their credit cards off every month. This worked well for many years, however, about five or six years ago I started to notice a trend developing where the credit cards were being closed by the credit card companies. Investigating this, I found that payments were always made on time and there was no apparent reason for the credit-card company closing out the cards. I began to experiment with different groups of clients to determine how we could combat this practice. Ultimately, we determined that if the card had even a small balance on it and it was paid on time then the credit card company would never close it out. In fact, if the card only had a balance of a dollar, there was never a problem. Later, I had the opportunity to represent a credit insider in a bankruptcy and she confided in me that the credit card companies do in fact close cards out if they have a zero balance. Cards with zero balances don’t make much money for the credit-card companies, so they get closed.
Many folks are concerned that their credit record will be adversely affected by a bankruptcy filing. Most the time, however, it’s in pretty bad shape by the time they file their bankruptcy. Others walk into my office with perfect payment records, never having missed payment in their entire lives. They often come in to see me the month before they’re going to be late for the first time in their lives. These folks have oftentimes borrowed money on credit cards to pay other credit cards. On paper, they look perfect. However, it’s a house of cards, and I generally see these folks about the time the house is about to come crashing down. In either event, bad credit record, marginal credit record, or a good credit record, the answer I have is the same. It doesn’t take long to reestablish a good credit record.
Many people want to know how long the bankruptcy filing remains on their credit report. The answer is, and always has been, 10 years. However, I quickly point out that the really important thing they need to know is how long the bankruptcy filing will hurt their credit. It is my opinion that, if the bankruptcy is not adversely affecting you, meaning that you can get what you need on credit and that your ability to borrow is restored, then it really doesn’t make much difference whether or not the bankruptcy is being reported on your credit rating.
In fact, in many cases, the filing of a bankruptcy actually improves your credit rating. Because a bankruptcy filing means that all debt you owed prior to the bankruptcy is wiped out, future credit grantors know that they’ll never have to worry about some creditor from your past popping up at some point in time later, suing you and garnishing wages, leaving you with less money to pay the other creditors. For this reason, filing a bankruptcy is actually the first step toward reestablishing good credit, for many people. We help rebuild credit after bankruptcy!
A friend of mine told me West & Hurley really knew their stuff about bankruptcy and that is why I chose them to represent me. Everyone treated me with dignity. They didn't make me feel any less of myself for filing bankruptcy. They treated me as a valued client. Whenever I had a question, the secretaries were eager to help me. I always felt satisfied and more knowledgeable in my particular situation at the end of the conversation. I think very highly of all the people at West & Hurley and would recommend their services.Diane Parthe
Me and my wife went though bankruptcy, it's been 6 months and we have a credit card and a 2012 bought new GMC truck. Richard West and Associates did an excellent job helping us file, and help us get our credit back on track. Our paralegal Lisa, did an excellet job helping us with our paperwork. We highly recomend filing with them, we had tried with a different firm, and they didn't help us in the same way, we are happy we had their help and expertise getting us back on track.Janie Wright
My wife and I filled for bankruptcy in 2008 with the help of West & Associates. Mr. West told us in our initial consultation that if we followed his advice and stuck to a plan we could rebuild our credit to a better state than it was before we filled. Though skeptical my wife and I worked hard on things like paying bills on time or early and building our credit little by little. By doing things like this and learning from past mistakes we were able to pay off our bankruptcy a year early and raised our credit score to just under 700 points. That is a 200 point difference from our score prior to getting help from West & Associates. We were also able to buy a new car 6 months after discharge with a very low interest rate. So when people tell you that filling will ruin your credit forever it just isn't true.Sherman Thatcher
I would like to thank the West & Hurley team for their hard work. They did an excellent job and were very professional. The staff was friendly and helpful. I will recommend West & Hurley to my friends.Christina Anglin
It was simply an easy process. They made absolutely sure I fully understood all of my choices. It was vital to me how they wasn't trying to sell bankruptcy since they also told me about other options like credit counseling as well as others. I felt like these people were taking care of My personal best interest...not just trying to find yet another client. I recommend them.A Google User