How Do I Recover and Rebuild Credit After Bankruptcy?
Bankruptcy Attorneys in New Jersey Explain Post-Bankruptcy Life
One of the greatest concerns people have when considering filing for bankruptcy is what will happen to their credit scores. Is there life after bankruptcy? How does one recover from bankruptcy?
As a bankruptcy attorney in NJ practicing for over 25 years, Gary L. Mason can assure all his prospective clients that not only is recovery possible after bankruptcy, but your financial situation and life will improve.
Can I Get Credit After Bankruptcy?
One of the more pervasive myths about bankruptcy is that debtors will never again be able to obtain any kind of credit after filing bankruptcy. This could not be further from the truth. Once your debts are discharged (and with certain exceptions), you will be able to secure a mortgage. You will be able to refinance. You will be able to finance a vehicle. Of course, patience is important. You may not be able to obtain this type of credit immediately. However, the more time you put between yourself and your bankruptcy filing, the less weight your bankruptcy filing will carry in evaluating your creditworthiness when compared to, for example, a twelve month payment history.
In general, a Chapter 7 bankruptcy will remain on your credit report for 10 years from the date of filing. A Chapter 13 bankruptcy may stay for 10 years also, but it is customary to be removed after seven years. As more time passes, the less lenders will be concerned about your bankruptcy. In fact, if you remain current and timely on your post-petition debt obligations, within 18 to 24 months after bankruptcy if you continue to pay bills on time, you will increase your credit score.
Will Other People Know I Filed for Bankruptcy?
Some people are concerned that an employer, family or friends in the community will know they filed bankruptcy. It is true that bankruptcy filings are public records; however, a person would only know the details of a bankruptcy filing if they went to the courthouse to specifically request the records. Most of the time, no one will know of a bankruptcy filing unless the person tells others.
It is unlawful for both public and private employers to fire an employee for filing bankruptcy. However, if a person is unemployed, the private sector may perform financial background checks as part of a screening process. There is no law that makes it illegal for prospective employers to reject an applicant based on bankruptcy. However, when a person is in a downward debt spiral that is out of control, the potential employer could negatively view your potential application after seeing uncontrolled, outstanding debt on the credit report, as well. You must weigh these considerations when making the decision to file bankruptcy.
Will Bankruptcy Affect a Government Security Clearance?
The military and government entities cannot use bankruptcy itself as a reason for not issuing a security clearance. However, having large amounts of debt in default or collections will affect a person’s chances at passing a security clearance. So if a person is struggling with large amounts of uncontrollable debt, filing for bankruptcy and taking care of the problem is likely a much better option.
More Questions About How Bankruptcy Works? Ask Our Bankruptcy Attorneys
At Garland & Mason, L.L.C., we have the resources and the experience to guide you through the bankruptcy process and advantages of bankruptcy while protecting your best interests. For more than 20 years our local bankruptcy attorneys have helped people like you obtain a fresh financial start.
Contact us today at (732) 358-2028 or fill out our confidential online form to schedule a free bankruptcy consultation. Our office is handicapped-accessible and is conveniently located just fifteen minutes from the New Jersey Turnpike and the Garden State Parkway. Parking is free.