It's a common misconception that bankruptcy absolutely wrecks your credit. And maybe at one point in time it did. Obtaining credit after a bankruptcy has been finished is a relatively easy task but one that may take a little work.
Post Discharge Credit Offers
Most new credit offers will come after a bankruptcy has been discharged. You may find that auto dealerships aren't content to wait for your discharge and start sending you offers. This may be a beneficial way for you to start rebuilding your credit. A dealer is most likely looking to turn over older and used inventory. So while you may not qualify to drive a brand new car off the lot, you may get into a decent used car. If you need a car and couldn't obtain one pre-bankruptcy, this may be a good time for a purchase.
Credit card banks may be more conservative with their offers. It's more likely that you'll have to apply for a card than wait for an offer to arrive in the mail. There are financial institutions that are post-bankruptcy friendly and will issue a card with a small limit. There will be a catch with the new cards in the form of high interest rates. It's best to use these cards for small purchases, say no more than $50 a month, and keep them paid off every month to assist with rebuilding credit.
Don't Rush Back Into Using Credit
Bankruptcy has given you back control of your finances. Assuming that you have changed your habits for good, you won't need credit much if at all. Take time to build a savings account for emergencies or down payments on a house or vehicle in the future. Stick to a budget every month to make sure you stay within your means.
The longer you wait after bankruptcy, the better your credit worthiness will be. If you feel that you absolutely must have a card for emergencies, then by all means, seek one out. But do not use this card for anything but a financial emergency. The lines of credit that you will be given post-discharge will be loaded with fees as well as high interest rates. Also stick to only one card as opening up many at the same time will throw up flags to the banks.
Consulting a Lawyer About Credit Issues
Talk to a bankruptcy lawyer for the best answers for obtaining credit post bankruptcy. You can get the best advice for your situations both current and future. Between you and the attorney, you'll be able to create a time line of when you should and shouldn't seek out new lines of credit.
