Life After Bankruptcy

 To many, bankruptcy is a back hole at the end of the bad credit spectrum, as it were, that sucks you in and never spits you out. Indeed, filing for bankruptcy is a life-changing experience, and the last resort of the direst of debtees. Additionally, new regulations on Chapters 7 and 13 bankruptcies are making these judgments harder than ever to obtain. Most people know the hardships of bankruptcy – judgments remain on public record and credit reports for seven to ten years, and effectively prevent the bankrupt individual from obtaining any loans or credit for the duration.Life after bankruptcy, however, is a different story, and one that rarely gets mentioned. At the point when the bankruptcy is discharged, the mark is removed from all reports, and the consumer has a clean credit slate

. Contrary to what may seem logical, creditors actually view formerly bankrupt individuals as good credit risks. An individual may only file bankruptcy once in an eight-year time span, and research indicates that people generally do not file for bankruptcy more than once per lifetime. Additionally, those who have sought and obtained bankruptcy protection once may have a significantly harder time re-filing, so their incentive to stay financially solvent is that much greater. The newly debt-free are so desirable, in fact, that they may themselves deluged with mail offers for credit cards, and solicited repeatedly for new business by the same companies that they once owed. Rates for these offers may be higher, at first, because the process of establishing credit starts over with the discharged bankruptcy. With patience and good use of credit cards, however, the formerly bankrupt can, over time, actually establish a strong payment history and a good credit score.   ■