Can I get a credit card after being discharged from bankruptcy?
It is a question that many bankruptcy filers are asking. Getting a card after being charge with
bankruptcy is so frustrating. Since responsible utilizing your credit card is one way to repair your credit
score. Having a bankruptcy issue stained your credit score however getting a credit card again is not
possible. It may be difficult but there are some credit cards for this kind of situation. Many banks and
financial establishments are offering the card to those bankruptcy filers for them to start all over again
and keep their financial standing in order and on the right track.
Bankruptcy filing is the most severe negative event that will ever happen to a credit report and will
leave a lasting impact on your credit standing. Because as long as your bankruptcy appears on your
credit score, it will lower your chance of getting a credit card again because of a low score. However,
there are ways for your to take into consideration so that you can still able to get a credit card after
being charge from bankruptcy.
According to the law, there are 2 types of personal bankruptcy you should know for your to rebuild
again your credit standing right away.
1. Chapter 7 Bankruptcy – this is where all your assets that are not exempted are being sold, to pay
off your debts. It is also called straight or liquidation bankruptcy. This is the type of bankruptcy that
will clear away all your debts in an instance. It will take around four to six months. If you are far
behind your bills and you don’t have the means or cannot afford a living and monthly expenses, this
will be your last resort, however, you have been pushed to sell your possessions. You can make
again a fresh start but once your credits are discharged, however, it will make your credit score
damaged severely.
2. Chapter 13 Bankruptcy – here in this kind of bankruptcy, your debts are being restructured, which
you and your creditor will come into an agreement of how many years you are going to pay your debt
usually with the time frame of three to five years. Though this one is less damaging to your credit
standing unlike the other one, it has also a strong negative effect.
Can I get a credit card after being discharged from bankruptcy?
However, you cannot get or apply for a new credit card if your bankruptcy is still in progress.
Court approval is required and the period where you can apply again for a new card will be based on
when you settle and complete your bankruptcy proceedings.
As mentioned on the above types of bankruptcy, Chapter 7 will take around four to six months after
you file for bankruptcy, to settled and complete your debts from then you and after for a new credit
card. While Chapter 13 will take about three to five years for you to fully settled your debt. And from
thereafter your last payment and waiting for some time, you can now apply for a new credit card.
Though settling your debts will not make your credit standing good as new again as Chapter 7
bankruptcy will stay on your credit report for ten years and Chapter 13 will stay up to seven years.
With all that said and done applying for a new credit card is still troublesome. Though responsible use
now of your card can now help you rebuild your score.
Getting a credit card after bankruptcy
Getting a card after being discharged from bankruptcy may be a good move if you will responsible
now enough to handle the use of your card. As mentioned bankruptcy will damage your credit score
and making sure to pay your credit card on time will help you rebuild your score again. Before getting
a new card, make sure you have checked your credit report and credit score as you will know where
you stand, and will help you in researching various credit card options and credit card approval
requirements. Before filling up for a new credit card be sure to consider what are the reasons what
cause you to involve in financial trouble in the first place and make sure that it won’t happen again this
time.
If the previous reason for your previous bankruptcy is because or a result of unforeseen events like
medical emergency, divorce, natural disaster, recession, or loss of job, likely you will become more
responsible now in handling your finances to avoid filing for bankruptcy again. Having an emergency
fund for at least three to six months of your monthly income will help you be prepared for any
unforeseen events that might happen in the future.
However, if you landed on bankruptcy filing because of overspending or mismanagement of your
financial funds, then it is advisable not to be quick in getting a new credit card again. But instead, if
you can try to consult a financial advisor to help you guide with the financial plan that will be workable
for you based on your income and monthly expenses. In that so, if followed religiously, you will be
involved again in another bankruptcy filing and will save yourself for some future mishap again. Once
you have demonstrated that you can now able to pay your dues on time and with growing savings on
the side, then it is the right time for you to apply for a new card again. Be more responsible to improve
your credit standing and build your confidence in managing your debts and finances.
Though bankruptcy will stay on your credit report for a maximum of 10 years, it will gradually lessen
the impact on your credit standing over time. This means your options will be limited only for some
time.
Bankruptcy is a major problem of most people now especially because of our current situation but it is
something we can work on and surpass over time. As long as we are open to change our spending
habits and hold back our purchasing power and take care to use it wisely, we will be back on our feet
again early than we could ever imagine.