What affect will bankruptcy have on my credit?
The Quick Answer
Bankruptcy may appear on a credit report for up to 10 years. But, that doesn’t mean you can’t obtain new credit during that time.
The Long Answer
Many people get confused on this topic. Usually that's because creditors warn people that if they file bankruptcy they will ruin their credit for 7 years. What they fail to tell people is that the bankruptcy may appear on a credit report for up to 10 years, but that doesn't mean you can't get credit for 10 years.
- Real estate lenders have many loan programs available to those who have bankruptcies discharged for two or more years (see March 1, 1997, real estate section of San Jose Mercury News).
- Car dealers bombard Sunday newspapers with ads targeting people who have filed bankruptcy.
- More and more creditors are actually trying to get people who filed bankruptcy to keep their cards.
Now, that's not to say that it's easy to get credit after bankruptcy. But, I want you to at least know the truth about bankruptcy!
Don't be fooled by creditors who try to get you believe to that you will be without credit for 10 years. Read Question 2. Can I keep one of my credit cards, Question 3. Can I keep my home and my car, and Question 15. Rebuilding your credit after bankruptcy, if you're still wondering what motivates creditors, and why they may not be telling you the whole truth.