Rebuilding Credit After Filing Bankruptcy

Rebuilding credit after filing bankruptcy

rebuilding credit after filing bankruptcy

Bankruptcy offers you a fresh start. After the discharge, the next step is rebuilding your credit.

Your bankruptcy has been discharged.  The next step is rebuilding your credit after filing bankruptcy.   Rothrock Law Firm files chapter 7, 13, and 11 bankruptcies in Cape Coral, Fort Myers, and Naples.  Part of our service includes counseling our clients about rebuilding credit after filing bankruptcy.  Chapter 7 bankruptcy stays on your credit report for 10 years, and chapter 13 bankruptcy stays on your credit report for 7 years; however, you can usually rebuild your credit within a year or two following the bankruptcy discharge.  These are some of the steps to rebuild:


1.    First, order a copy of your credit report approximately three months after you get your bankruptcy discharge.  You are entitled to get a free copy of your credit report from all three major credit bureaus once a year at  Make sure that your debts show up as “discharged in bankruptcy” or “included in bankruptcy”  on the credit report.  If they do not, file an online dispute.  Your report should be corrected within thirty days.

2.    If you reaffirmed a debt in bankruptcy, such as a mortgage or car loan, the creditor should report your payments on your credit report.  Your score will eventually go up.  Again, check your credit report to make sure that the lenders are reporting the payments on the debt that you reaffirmed.

3.    Apply for 3 credit cards.  If you use the cards to buy gas and pay them off in full at the end of the month, your score will go up.    Try to utilize less than 20 per cent of your available credit and try to pay off your cards in full at the end of the month.  This will help your credit score tremendously.

4.    If you didn’t reaffirm any debts and you can’t get any credit cards, ask your bank if they have a secured loan program.  For example, you might purchase a $1,000 certificate of deposit from them and they give you a $1,000 line of credit using your CD as collateral.  You might also be able to get a secured credit card.  Keep in mind the secured credit cards can charge very high fees, such as $150.00.

5.    Look into lease to own options on housing.  Particularly in Cape Coral, many investors purchased foreclosed homes for cash and are now leasing them with options to purchase. The lease purchase option gives you the opportunity to restore your credit over a few years and also to apply some of the lease payment toward a down payment on the purchase.

6.  Credit Karma offers a free membership that allows its members to view their TransUnion credit scores.  Monitoring the score the first year after filing bankruptcy is essential to rebuilding credit after bankruptcy.


One of my chapter 7 clients rebuilt his score from 500 to 660 and was able to get a car loan on a new car for 5.75 percent interest within 9 months of getting his discharge.  Another client qualified for a mortgage at 4% interest 3 years after his discharge.

There is no hard and fast rule for rebuilding credit after filing bankruptcy.  Every person’s situation is different.  Factors that will influence your ability to get credit include your employment history, your income to debt ratio, the amount of down payment you are willing to contribute, and the overall economy.  The federal government is imposing strict lending standards at this time for mortgages.  Currently, in Southwest Florida, most of banks are requiring at least four years after your discharge to give you a mortgage.  For FHA loans, the wait period is two years after a chapter 7 discharge or one year of consecutive chapter 13 payments.  A new program went into effect at the end of 2013 that shortened the waiting period upon  showing of “hardship.”


About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.