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As you likely already know, it takes years to build good credit. Many men and women put a lot of effort into their credit scores, decades worth to achieve high credit scores.
Unfortunately, there’s a few things out there that can damage your credit immediately, one of them being Chapter 7 bankruptcy.
If you’re considering filing for Chapter 7 or you already have and you’re wondering what toll it’s going to have on your credit, this article is going to help.
If you file Chapter 7 bankruptcy, it’s going to allow you to remove all of your unsecured debts. You’re going to have a new start, somewhat.
Chapter 7 is going to hurt your credit but it may not be as bad as you’re thinking it can be. Here’s why.
Rebuilding Credit After Chapter 7
For most of you, once you file your Chapter 7 bankruptcy, you’re going to be able to immediately begin rebuilding your credit. You do have to wait for your discharge, but once you have that, you can begin working on your credit right away.
How Long Does Chapter 7 Bankruptcy Last?
In most scenarios, Chapter 7 is going to last 90-120 days. You’ll need to file for it and once you receive your discharge, it’s a done deal.
Now, if you have a special complex case, it can take longer.
How Long Does Chapter 7 Stay On Your Credit?
Your Chapter 7 bankruptcy is going to follow you around for a long time, 10 years to be exact. While that sounds like a grave situation as it pertains to getting new credit, it’s not a nail in the coffin.
If you’ve showed in the past you can be responsible with your credit, you’ll have some offers out there that will allow you to rebuild your credit.
In fact, if you’ve already received your discharge, it’s likely you’ve already been receiving offers for new credit.
Think about it, if the creditor knows you had a bankruptcy, they likely feel you’ll be sure to make your payments now because your discharge gave you financial breathing room.
How Do I Start Rebuilding My Credit After Bankruptcy?
There’s no question about it, the road ahead is going to be long.
At some point, you have to move on and start rebuilding your credit.
You may be surprised that you’re receiving credit card offers in the mail, don’t be.
If you’re not receiving credit card offers, don’t worry, there’s a few things you can do to begin finding a few cards to start building your credit again.
You can sign up for free, check on your credit scores but these 2 also allow you to apply for new credit cards.
With Credit Karma, they have a score indicator that will tell you your odds for getting approved for specific credit cards.
Furthermore, Credit Karma has a ton of great features that will aide you every step of the way to rebuilding your credit.
Before You Start Getting New Credit Cards
If you’re fresh off your Chapter 7 bankruptcy, you do need to be aware of a few things before you say “yes” to any credit cards.
You may also see credit card offers that have high fees.
Every scenario is going to be different, some of the credit card offers you’re receiving may have low APRS and no fees.
We’d recommend that you take your time.
Rightfully so, but you may want to take your time and see which credit card is going to give you the best offer.
Some of you may be forced to get a secured credit card and understand, that’s ok.
Now, a secured credit card requires a deposit.
If you deposit $500, they will give you a $500 credit card.
Being An Authorized User
Another way you can start building new credit is by being an authorized user on someone’s credit card.
Avoid Another Bankruptcy
Sure, it’s the big elephant in the room but something forced you to have a bankruptcy.
We’re not going to tell you how to spend your money but you do need to make sure you never have to go through bankruptcy again.
While you’re here, go ahead and get signed up on our mailing list.