Life After Bankruptcy

What Happens After Bankruptcy Is Mostly Up to You

We have all heard the myths and horror stories: If you file bankruptcy, you will be living in your parents' basement and driving a beater car from a local charity organization. The fact is, bankruptcy has a different impact on everyone. Generally, though, people start to shake off the negative impact on their credit rating relatively quickly. You can start rebuilding trust with creditors immediately and you will probably stay in your own house and drive your own car if you decide to.

The law offices of Burns & Hansen, P.A. wants you to know the facts about what your life will be like after bankruptcy. If you are struggling with making minimum payments on your credit cards and juggling bills every month, the chances are good that you have already reached the point of no return. Chapter 7 or Chapter 13 bankruptcy is a legal option that gives you and your family the second chance you deserve.

Contact us to arrange a free initial discussion with one of our experienced lawyers today. Our attorneys have helped many people get the fresh start they need for a brighter financial future. We are ready to help you.

The first year after bankruptcy: After you have completed the bankruptcy process, you will go through a short period of time in which you should learn to live on a cash basis. You will not have credit card accounts and getting a bank loan will be nearly impossible. During this time, you can start doing some things to improve your credit-worthiness, including applying for a secured credit card and making ALL monthly payments on time for your mortgage, car payment and other payments you maintained through the bankruptcy. If you are looking for a new apartment, you may find that certain complexes will not accept your lease application.

One year after bankruptcy: If you kept your monthly payments up to date, you will probably be accepted for an auto loan or other personal credit, but you will pay a higher interest rate as a sub-prime customer. You will also receive invitations to apply for high-risk credit cards at very high interest rates. Be very careful about applying for credit. Getting turned down can raise a red flag to banks for future loan requests. If you have kept your monthly payments up to date, you will probably have little trouble finding an apartment complex that will accept your lease application. Many mortgage lenders will also accept your application, at a sub-prime interest rate.

Eighteen months to two years after bankruptcy: You will probably be accepted to receive one or two credit cards with low credit limits of about $1,000. You will also have less trouble getting a car loan, but you will still be considered a risk and your interest rates may be higher.

Three years after bankruptcy and beyond: You will still be considered a credit risk and face higher interest rates on loans, but rejections for loans and credit will probably be rare. Your credit score will be significant higher.

Ten years after bankruptcy: Your bankruptcy will be removed from your credit report altogether and will have no adverse affects on your credit — if you have maintained a solid record of payments over the years.

Contact the Minneapolis law offices of Burns & Hansen, P.A. to learn more about bankruptcy options to help you get the fresh start you need. We represent clients throughout Minnesota.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.