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Building Post-Bankruptcy Credit: It May Be Easier Than You Think

One of the biggest concerns that people who file bankruptcy in San Diego and nationally have is their credit. Specifically, how long will it take them to dig out of the credit hole that having a bankruptcy on a credit report will create?

First, it’s important to note that although a bankruptcy will negatively affect your credit, it is surely better than the alternative—paying minimum payments on cards while being in default for the next 20 years. With a bankruptcy, particularly a Chapter 7, you begin to build credit the day after your bankruptcy is over. Every day that goes by is another day farther from your bankruptcy and a day closer to better credit.

There are things you can do to help the process of improving credit along after bankruptcy. One is establishing new credit.

New Credit Offers After Bankruptcy

Many clients are surprised to learn how easy it is to get certain kinds of credit, sometimes immediately after bankruptcy. And while we don’t advocate digging yourself into a credit hole after you’ve gotten your Chapter 7 discharge, it is wise to start having some credit, and paying it off timely on a monthly basis to build your credit back up.

One way to do this is through credit cards, which will be offered to you after your discharge. Creditors know you’re a safe bet—you just discharged your debts, and can’t do so again for 8 years, and so you’re a great target for credit.

The offers you get may not be fantastic, or have the best terms. In many cases, you will be offered secured credit cards—cards that you may have to put a deposit down on, and then borrow against.

What to Look For With Credit Offers After Chapter 7 Bankruptcy

A recent article on Investopedia analyzed the best post-bankruptcy credit cards for bankruptcy debtors. You can read the article in full there, but some things to look for when getting secured cards include:

  • Fees – Is there a yearly membership fee? Or a monthly maintenance fee? Some can be as high as $75 per year, and $6 a month. Some have none at all.
  • Interest – Do not be too concerned over interest. You will only be putting a small amount on your new card, and paying it off immediately. The interest won’t kill you as much as building credit will help you. Some cards also offer grace periods, where they will asses no interest if you pay in a specified period of time.
  • Reporting – Make sure you get a card that reports timely payments to the major credit reporting agencies, otherwise you’re not doing yourself much good. The major providers usually do, but call to be sure before you take out the card.
  • Secured to unsecured – Some cards will let you change from secured to unsecured (and return your deposit) after a certain period of demonstrated timely repayments.

Bankruptcy is not the end of your credit. It’s more like the beginning. With proper post Chapter 7 discharge planning, and responsible use of credit, you may find yourself in the land of better credit sooner than you think after filing bankruptcy.

If you’re considering bankruptcy, you want lawyers that are with you even after your discharge is entered. Let experienced San Diego bankruptcy attorneys evaluate your case and discuss with you the best and safest path to good credit and a fresh start. Contact the Bankruptcy Law Center for a free consultation today.

See What Our Clients Have To Say

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Roger C.

I reached out to BLC to help assist with a chapter 7 business bankruptcy and they provided excellent guidance, advice, and support through the entire process. In my case an adversarial action was filed by one of the creditors and attorney Ahren Tiller and his staff provided sound ...arguments which prevailed. Couldn’t have found a more experienced and supportive team to represent me in a tricky situation. I would highly recommend them to anyone making the difficult but sometime necessary decision to find financial relief. Read more
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Justin R.

Like many others before and during the pandemic, life happenings caused me to be in a financial situation to warrant bankruptcy. The BLC was super professional all the way through the entire process. Right after I paid for my Bankruptcy, I got sick and had to have surgery and recovery. Then we ...were in full Pandemic mode. They were gracious to delay my filing until I was recovered and ready to file. I could not ask for more. The process was over all quick and painless for a simple Bankruptcy like mine. I feel a weight has been lifted and I can rebuild. Thank you for all your arduous work and patience, Gabriel, Ahren, and their teams are knowledgeable and efficient. Read more
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Katey Huntley

Responsive, friendly, kind, extremely easy to work with! So knowledgeable and made this entire process painless. Very grateful!

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Lynn Molina

Gabriel Hanna, Esq and the staff at BLC helped me in a very difficult time. I appreciate all the help and care they gave my case.

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Linda Cramer

I can’t say enough of how much this bankruptcy law firm helped me with my financial situation. They were all so helpful, efficient and made the difficult time and process as quick and easy as possible. I would recommend them to anyone I know and am glad to give my public recommendation as well. T...hey truly deserve a five star plus rating. Read more
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Andrea N.

I am very happy with my experience with BLC. Bankruptcy is not something anyone wants to go through, however everyone at BLC made my experience pleasant and easy. The process was explained thoroughly and I had an easy time reaching out and connecting with my attorney. Anika Renaud-Kim was my attorney ...and she was nothing short of amazing! She was very patient and generous with her time. Ms. Renaud-Kim definitely made me feel at ease and comfortable through the entire process. Read more
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Lidia Paramore

they did a great job for me, helped me anytime I needed something, my Lawyer Gabriel Hanna is the best, gave lots of confidence all the time..thanks BLC I will.always recommend you, I’m very grateful for your service!!!

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Rachael C.

When searching for information I had called a few different firms and received consults. BLC was the only one who didn’t shy away and provided answers and information during the consult. Once I agreed to move forward, they were supportive, informative, and eased my anxiety through the whole process.... I can’t recommend them enough. Read more
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Emily Martinez

AmazingI had many questions and uncertainties and the carefully explained it all and made it easy to understand. They facilitated a fast and easy process making this scary difficult thing simple

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Legal Disclaimer: The Bankruptcy Law Center is a California Licensed law firm with attorneys licensed in the state of CA, NY. Attorney Ahren Tiller is responsible for this advertisement. Bankruptcy Law Center’s principal office is located at 1230 Columbia st. Suite 850 San Diego, CA 92101. Prior results listed on this site do not depict or in any way infer a prediction or outcome.We are a debt relief agency proudly providing options to people with financial problems. View our Privacy Policy