Our office continues to operate during our regular business hours, which are 8:30 am - 5:30 pm, Monday through Friday, but you can call the office 24 hours a day. We continue to follow all recommendations and requirements of the State of Emergency Stay at Home Order. Consultations are available via telephone or by video conference. The safety of our clients and employees is of the utmost importance and, therefore, in-person meetings are not available at this time except for emergencies or absolutely essential legal services.

Can I Rebuild My Credit After Bankruptcy?

Bankruptcy Lawyer Bryan W. Stone answers the question: “What are the pros and cons of bankruptcy?”


Bankruptcy is an option for Americans to discharge their debts and set themselves up to have a better financial future. We live in a world in which a person’s credit history can dictate some important parts of their lives. Credit scores impact your ability to rent an apartment, buy a house, and even secure a credit card to have in the event of an emergency. Filing for bankruptcy will affect a person’s credit score; there is no way to avoid it. However, a misconception surrounding bankruptcy is that there is no way to rebuild credit after filing for bankruptcy or that the process takes too long. There are ways to rebuild your credit in an efficient and timely manner.


Credit-payment-Charlotte-Lake-Norman-Monroe-Bankruptcy-Lawyer-225x300As stated above, bankruptcy can be the tool by which a person receives financial freedom and sets them up for future success. Some people refrain from filing for bankruptcy, even if it is in their best interest, because they do not want to ruin their credit score. Chapter 7 and Chapter 13 bankruptcy are the most common types of consumer bankruptcy. Both will certainly lower a person’s credit score, but that should not deter filing for bankruptcy. Credit can be repaired if the work is put in to do so.


How to Re-Establish Credit


Bankruptcy will stay on your credit report for 10 years after discharge. Most individuals filing for bankruptcy are behind on their mortgage, auto payments, or credit cards. Failure to pay these fees also have a negative impact on credit score. Your credit score going down is something that you can not change; instead, focus on the ways to rebuild your credit. The way to rebuild credit is slightly different for Chapter 7 and Chapter 13 bankruptcy.


In a Chapter 7 bankruptcy, an individual can begin to re-establish credit immediately following the discharge of debt that usually occurs approximately a few months after filing the case. A person is allowed to apply for types of credit immediately – credit cards, loans, etc. This does not mean every application will be accepted. Smaller lines of credit will be more likely following bankruptcy and larger lines of credit further down the line. On-time payments will create a positive credit history and open new doors for credit.


Chapter 13 bankruptcy takes three to five years to complete. When the bankruptcy is confirmed, meaning when the repayment plan is confirmed, creditors can report negatively about a debtor to credit reporting agencies. Creditors will likely not report every on-time payment made in the bankruptcy plan, but instead will just inform the credit reporting agencies that you have filed bankruptcy. In order to establish to credit during the bankruptcy, permission must be given by the court. Otherwise, after the case is completely discharged, an individual can apply for lines of credit without permission.


If you are considering bankruptcy, you need an experienced bankruptcy attorney. The bankruptcy attorneys at Arnold & Smith, PLLC are here to help you get back on track. We want to get you a “fresh start” at a better financial future. Contact us today for a consultation. We want to guide you through the bankruptcy process so that you can begin toward a better financial future. If you are contemplating bankruptcy in the Mecklenburg County, Iredell County or Union County area, please call the skilled lawyers at Arnold & Smith, PLLC at 704-370-2828 or find additional resources here.







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