You might think it is a case of “once in bankruptcy, always in bankruptcy.” It’s not true, however. The law sets out specific amounts of time that bankruptcy will remain on your credit record. After that has passed, no one need ever know.
If you file for Chapter 13, you will have a clean record again in seven years. If you file for Chapter 7, it will take 10 years.
Will I be unable to get credit before then?
There are several lenders out there who specialize in offering loans and credit cards to people who have filed for bankruptcy. Not only can these get you credit if you need it, but they can help you to start rebuilding your credit score straight away, long before the bankruptcy clears from your record.
What about the debts that bankruptcy does not cover
Let’s say you opt for Chapter 7, clearing things such as unsecured loans, credit card debt and medical debt. You may still have some outstanding financial obligations that you cannot wipe, such as overdue taxes or child support payments, plus student loans. With legal help, you may be able to renegotiate the payment terms to ensure you can make all these payments, showing lenders that you are someone they may want to consider lending to in the future.
If you take Chapter 13, you will be obliged to negotiate payment plans on all outstanding debts, as unlike Chapter 7, things are not written off. That said, some lenders may agree to reduce the total amount you must pay them, provided you comply.
You will not be the first person to file for bankruptcy, and you certainly won’t be the last. Many have gone on to great financial success after using a filing to get them out of a place they could not otherwise have gotten out from. To find out more, seek legal help.