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Bankruptcy in Virginia – Credit after Bankruptcy

What’s The Worst Thing That Usually Happens?

There is no truth to the urban legend that you have to go for seven years with bad credit after filing bankruptcy. Bankruptcy will be on your credit report for 10 years, but even so you can have good credit in just three years. In fact, we’ve got some great customer testimonials that speak to just this topic.

(Here’s a letter from Quicken Loans that came to us, less than three years after bankruptcy, telling our client he was PRE-APPROVED to refinance her mortgage at 2.99%.)

We make sure you know to do the things you need to do to get good credit in three years.   And we follow up with the credit bureaus after your bankruptcy is over to make sure your credit reports are right.

If necessary, we sue the creditor or credit bureaus to get your credit report right after bankruptcy.  After-bankruptcy credit report law is a new area of the law.  We’re one of the pioneers.

For the first two years after bankruptcy, you will have terrible credit. If you have to get a car, please try to pay cash for a late model car rather than buy from a car dealer.  Every month that you put off buying a car, you save yourself $350 on what the cost of financing your next car will be.  After two years of rebuilding credit, you can get a car at around 13%; after three years around 8%.  That 8% will save you more than $10,000 in finance costs compared to what you would pay if you go out and get a car right after the bankruptcy.

Credit Limit

You can get a $300 limit credit card right away and start rebuilding.

With three years of rebuilding credit, you will be able to finance a house at a good mortgage rate (if you are making enough money).  Two years if you have veterans’ eligibility.

With a year rebuilding credit, you will start getting approved for $1000 and higher credit cards again. (You should probably get three or four credit cards, use each one for one or two tanks of gas a month.)

Ninety percent of your credit score is based on what you’ve done the last three years.  So once you have three good years after bankruptcy, you’ll have a good credit score.

Filing for Chapter 7 Bankruptcy is better for your credit than getting help from a credit counseling or debt management agency. Bankruptcy is way better for your credit than signing up with a debt settlement company.  Bankruptcy is also better for your credit than sending late or partial payments.