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Moving forward after bankruptcy

Bankruptcy is, simply put, not a life sentence. It is not an indication of failure. It is not the rock bottom, or the end of your financial life. Bankruptcy is there to help people get back on their financial footing after a rough stretch of late payments, overwhelming debt, write-offs/charge-offs and other related issues.

Bankruptcy offers a fresh financial start, but it does take time to recover from a bankruptcy, though. If you have filed – or you are learning more about the process – you might be curious as to what that recovery time looks like.

How long before I can get a car?

Regardless of whether your consumer bankruptcy was filed under Chapter 7 or Chapter 13, chances are good that you’ll qualify for financing of a new or used vehicle about a year after filing. The waiting period could be even less if the dealership offers self-financing instead of going through a financial institution like a bank or credit union.

When can I get a mortgage?

The typical filer should qualify for a new mortgage – or a refinance – within about two years after filing. The period of time could be less, but there is something to remember about a post-filing mortgage: you will likely end up paying more in terms of a higher interest rate than someone who hasn’t filed or someone with a better credit rating. Rates can be renegotiated in the future after you make payments for a period of time or once the bankruptcy is no longer on your credit report. Speaking of that…

How long does a bankruptcy stay on my credit report?

According to MyFico.Com, a Chapter 7 bankruptcy stays on for about 10 years, while a Chapter 13 bankruptcy should be automatically removed after seven years. It might be possible for a Chapter 7 filing to be removed prior to that 10-year deadline under certain circumstances. An experienced bankruptcy attorney will be able to help you determine if your situation makes you eligible for early removal of a Chapter 7 filing.

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