Is There Credit After Bankruptcy?

One of the biggest worries on people’s minds before deciding to file bankruptcy is that, once they file, years will go by before they’re able to obtain credit again. How will they operate without a credit card, without being able to buy a car if they need to, even sign a lease to rent a place to live, they worry.

Ironically, a report from the Consumer Bankruptcy Project reveals the opposite is the case! Not only is it possible to get credit after filing bankruptcy, it might actually prove easier than in the time leading up to the bankruptcy. How can this be, you ask?

Well, let me first remind you that everyone who is behind on bills in a big way already has credit problems. It isn’t bankruptcy that “ruins” credit, it’s overdue bills. Bankruptcy is the solution, not the problem.

Back to the Consumer Bankruptcy Project… the report shows that, no matter what creditors like to say, bankruptcy is encouraged by the credit industry. (“The proof is in the pudding,” as my grandma likes to say.) Without even looking, nearly every debtor receives credit offers shortly after filing bankruptcy. Most of the offers come from credit card companies, but plenty are for car loans and even mortgage loans.

To me, having practiced bankruptcy law in Indiana for so many years, the biggest irony is that people who unsuccessfully try debt negotiation and credit counseling, all in the name of avoiding bankruptcy, don’t have as easy a time getting credit as the folks who go ahead and file.

So, whatever that says about creditors and the motivation behind their business decisions, post-bankruptcy credit is alive and – well, definitely available.