Repairing Your Credit After Filing for Bankruptcy


Filing for bankruptcy can allow you to start fresh with your finances. Whether you are considering filing for bankruptcy or have already filed, obtaining accurate information about repairing your credit after bankruptcy is essential. At The Law Offices of Wes Stover, we are here to help you every step of the way as you get your finances back on track. In the meantime, we’ve answered some common client questions about rebuilding your credit after bankruptcy. 

How Long Does a Bankruptcy Stay on Your Credit Report?

Generally, if you file for Chapter 7 bankruptcy, the bankruptcy will stay on your credit report for 10 years. A Chapter 13 bankruptcy usually stays on your credit report for seven years.  

While the derogatory mark due to Chapter 7 bankruptcy will likely not be removed from your credit report until after the full 10 years have elapsed, details of discharged debts should stop appearing on your credit report after seven years.  

Does That Mean I Can’t Do Anything Requiring Credit for 7-10 Years?

No, once you receive your Discharge, Order, you can start using credit cards and apply for loans. In fact, using credit cards or taking out a small loan is advisable so that you can work on rebuilding your credit.  

Credit Cards

After bankruptcy, getting a secured credit card is an excellent way to begin rebuilding your credit score. A secured credit card requires a security deposit; your credit limit increases as you put more money down. Since the lender incurs no risk, there is a high likelihood that you will be approved. Your attorney can help you choose a secured credit card that will work for your unique situation.  

Buying a Car

You can get a car loan after your Chapter 7 discharge, which usually comes four to six months after you file. You can also buy a car after your Chapter 13 case is completed, which usually takes three to five years, but, if you can demonstrate an honest need, you may ask the Bankruptcy Judge for permission to purchase a car before this date. Your attorney will usually advise you to wait six months after you file for Chapter 13 bankruptcy to purchase a car. 

It’s best to apply for the loan at a bank or credit union where you already have accounts—banks and credit unions would rather work with a known individual than someone with whom they have no history. Some auto lenders also work with people who have bad credit.  

Buying a House 

You can apply for a conventional loan to buy a house four years after your Chapter 7 discharge. The requirements are different for certain government-backed loans; for example, you only have to wait two years to apply for a U.S. Department of Veterans Affairs (VA) or Federal Housing Administration (FHA) loan. (FHA loans have lower credit requirements, which makes them good choices for people who have filed for bankruptcy.) Your attorney will advise you on your options for taking out both conventional and government loans.  

If your Chapter 13 bankruptcy was dismissed, you can apply for a conventional mortgage four years after your dismissal. If your Chapter 13 bankruptcy was discharged, you can apply for a conventional mortgage four years after filing and two years after your discharge. However, as is the case with Chapter 7 bankruptcy, other loans have shorter waiting periods. For example, you can apply for an FHA loan as soon as your Chapter 13 case is dismissed or discharged.  

What Steps Can I Take to Rebuild Credit?

Even though your bankruptcy will remain on your credit report for some time, you can take steps during that time to rebuild your credit score: 

Check your credit report and dispute errors with credit agencies

After your discharge, you’ll want to make sure your credit report is accurate so that you can move forward unimpeded by dated information.  

If you filed for Chapter 7, request your credit reports from Experian, Equifax, and TransUnion three to four months after you get the formal letter from the court informing you that your case has been discharged. Review the information with your attorney to make sure that the relevant accounts are labeled “discharged in bankruptcy” with zero balances. If you filed for Chapter 13, request your credit reports about four months after your case is discharged at the end of your repayment period and check them for accuracy. 

Use your secured credit card. 

As outlined above, a secured credit card can help you begin to build good credit. Make sure you pay the bills on time and maintain a balance that is lower than the credit limit on the card. Try to use this card for payments that you need to make monthly and that can be paid automatically, such as utility bills. 

Pay off loans on time

If you’ve taken out a loan to purchase a home or car after filing for bankruptcy (as outlined above), make sure you make loan payments on time. Your attorney can guide you through the process of applying for and paying off loans after filing for bankruptcy. 

Here to Make a Difference

Our bankruptcy attorney can assist you with obtaining all relevant information, reviewing your options, and dealing with the courts, creditors, and credit agencies. Our bankruptcy attorney Wes Stover prides himself on creating tailored plans of action for his clients, who each have unique situations when it comes to bankruptcy. Because we only practice bankruptcy law, we serve as a focused and expert resource for our clients who are filing for or going through bankruptcy. Call The Law Offices of Wes Stover, serving the entire State of Mississippi, at (601) 401-8996. We have offices in Jackson, Mississippi to serve the tri-county area and in Laurel, Mississippi to serve the Hattiesburg-Laurel area (Pine Belt Region). And we do telephone consultations throughout all of Mississippi.

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