Rebuilding Credit After a Chapter 7 Bankruptcy

A concern which often comes up when considering Chapter 7 bankruptcy is that it will affect one’s credit negatively and make it difficult to rebuild credit. If you are considering bankruptcy because you are behind on your credit card or medical bills, chances are your credit report has already been negatively impacted. While filing bankruptcy does affect your credit, it does not hinder you from rebuilding your credit in the future. Although a bankruptcy usually gets reported on your credit for up to ten years, it certainly does not mean that you cannot get new credit for ten years. Most people who file for Chapter 7 bankruptcy begin to receive credit card offers shortly after their case is closed. Over time, the terms offered are more favorable, and credit limits are often increased with responsible use of credit cards. Because Chapter 7 bankruptcy wipes out most of your unsecured debt, it allows for a favorable debt to income ratio. With strategic and responsible use of credit, you will be able to slowly rebuild your credit score. It is not uncommon for those who have had a Chapter 7 filing to be able to purchase a vehicle or even a home a few years after the closure of their case.