If you want to buy a home after bankruptcy sooner than 2 years after the discharge, then you will usually need to have a flawless payment history since the discharge. You will probably also need money for a down payment. FHA and VA home loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy. If you are concerned about buying a home after your bankruptcy discharge, make sure you begin to re-establish credit as soon as possible. Make on-time payments, keep outstanding debts less than 50% of your total credit lines, and try to pay off balances as soon as possible.

When you go to buy a home after bankruptcy, lenders will closely look at your debt to income ratio. Make sure you do not end up in financial trouble again by keeping a close eye on your total liabilities. You will need documentation supporting your total monthly income, and if you are self-employed you will need the past two years’ worth of tax returns (assuming a full documentation loan). Your lender will determine how much home you can afford to buy. Make sure you can easily afford the monthly mortgage payment, however, because you do not want to end up in bankruptcy again.

The first step towards getting approved for a car loan is reviewing your credit report. Make sure there are no errors and that all credit accounts included in your bankruptcy are showing as closed. It’s very common after a bankruptcy to see open accounts that should be closed. This can hurt your credit score and prevent you from qualifying for financing.

Next, you want to review your budget and determine how much you can afford. Be sure to consider both the loan amount and the term of the loan (how long it will take to pay off the total).

When you apply for a car loan, you will usually be asked if you have ever filed for bankruptcy. Be honest and explain what caused your bankruptcy and the steps you have taken to resolve your financial problems. Be sure to talk about improvements to your credit score and financial record. Consider using an online car loan lender. Online car loan lenders deal with thousands of loans and can usually find you a better deal than a local car dealership can. Once you are approved with an online car loan lender, they will send you a check that you can bring with you when you shop for cars. This will tell the local dealership that you already have been pre-approved for an auto loan, making the process flow much smoother. Using these tips, you should be able to get approved for a car loan, despite any past bankruptcy discharges.

If you’ve filed for bankruptcy, it’s important that you understand how to improve your credit after the bankruptcy has been discharged. Improving your credit is an important step if you hope to qualify for financing in the future. The first step to improving your credit after bankruptcy is establishing a budget, and sticking to it.

Record exactly how much you spend each month on various categories such as rent/mortgage, food, utilities and other basic bills. Also include variable expenses such as clothing, leisure and hobby expenses, and gas/travel. Establish a predetermined spending amount for each category and stick to it. Learn to control your expenses through discipline, tracking, and budgeting.

Consider opening a secured credit card, which will also help you rebuild your credit score. Secured credit cards work very similarly to debit cards. You cannot spend more than you have on a secured card. This should help with budgeting, and will prevent you from spending more than you have. Keep your total balance on the secured credit card to 20% (or less) of your maximum credit line.

Six months after your bankruptcy, consider opening a new credit line (in addition to your secured credit card). By this time, you may be able to qualify for an unsecured card (though it will probably have a very high interest rate). Use this card along with your secured credit card. Keep all your balances small and make consistent, on-time monthly payments. In another six months, consider opening a third line of credit by applying for another unsecured credit card. In 24-36 months, your credit scores should be increasing and you should have more available credit options.

Most people think that they will not be able to get credit for 10 years after filing for bankruptcy. This is a myth. You will get offers for loans and credit cards after filing for bankruptcy. However, they will probably either have very high interest rates or require collateral, since you are considered a risky borrower in the eyes of the lender (due to your past bankruptcy).

Until your bankruptcy is discharged, you will likely receive financing offers (cars, loans, credit cards) immediately with very high interest rates. If you want those interest rates lowered, you will need to work on rebuilding your credit. Rebuilding your credit after bankruptcy is crucial if you hope to get financing with low interest rates and good terms.

A common question we get is whether or not a person can ever get a home after filing for bankruptcy. You can get financing on a home after bankruptcy, assuming you have re-established a good track record of on-time payments. You can usually qualify for financing on a home as early as 18-24 months after your bankruptcy has been discharged.

Nothing that appears on your credit record is “forever.” Circumstances change, and you can always overcome your past financial troubles. After your bankruptcy is dismissed, consider getting a secured credit card (which works like a debit card) to start re-establishing a good credit history. Living on a cash-only basis may be a good idea for people who can’t handle the temptation of credit cards. However, if you want to re-establish a good credit score (and qualify for financing in the future), you will need to participate in the credit system. Start by opening a secured credit card, which will prevent you from spending more than you have.

However, there are a few exceptions regarding inheritances, property settlements, and life insurance benefits.  If you receive an inheritance, property settlement, or life insurance benefit within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors (assuming the property or money is not exempt).  This rule exists to prevent abuse of the current bankruptcy laws.  Aside from this one limitation, you are free to own anything you like after bankruptcy.

Many people ask about checking account ownership after filing for bankruptcy.  Can you open a checking account after filing for bankruptcy?  The answer is yes.  Anyone can open a checking account after filing for bankruptcy, assuming you have not bounced a lot of checks in the past.  If you have a history of bouncing checks repeatedly, then you may be denied the ability to open a checking account.

Home ownership after bankruptcy is also possible – although you will usually need to wait for a certain period of time before lenders will work with you. You may be able to get a home loan beginning two years after a Chapter 7 bankruptcy has been discharged, and one year after filing a Chapter 13 bankruptcy.  FHA and VA mortgage loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy.

Once your bankruptcy is legally discharged, you can focus your efforts on saving money and paying off any debts that were not eliminated in the bankruptcy (i.e. child support, taxes, alimony).  In rare instances, you may still get a phone call or letter from a creditor trying to collect a debt.  Legally, any debt included in a bankruptcy case is uncollectable.  If you receive a call or letter relating to a debt that was included in your bankruptcy case, contact the creditor in writing and explain that your debt was included in the bankruptcy.  If the creditor continues contacting you, call your bankruptcy attorney.

Be very cautious about acquiring new debt after your bankruptcy is discharged, since you have no legal protection against any new debt.  Just like anyone else, you can be sued, have wages withheld, and lose property such as a car or personal property for any unpaid debts.   If you are plan to buy a car, house, or get a personal loan after your bankruptcy is discharged, you will probably need to explain why you filed for bankruptcy.  Lenders may be afraid that you will default again.

Reasons that lenders will commonly accept for bankruptcy include: large medical bills, or a sudden job or business loss.  Lenders may also be particularly concerned with verifying your income.  Getting approved for credit cards without paying extremely high interest rates will be very difficult.  Some lenders, particularly large banks will not deal with borrowers who filed bankruptcy until 7-10 years have passed and the bankruptcy is no longer appearing on your credit report.

During the 10-year period while the bankruptcy is on your credit report, you may receive credit card offers with very high interest rates (sub prime rates).  This is because lenders view you as a “high risk borrower” due to your past bankruptcy.  You will need to work diligently to improve your credit score, and re-establish trust with creditors by paying your bills on time.

Typically, it is easier to re-establish credit with a Chapter 13 bankruptcy, than with a Chapter 7 bankruptcy. Chapter 7 bankruptcy is the blackest mark you can have on your credit.  In Chapter 7, most of your debts are discharged (with the exception of child support, alimony, etc.).  This makes qualifying for a new loan or a new credit card very unlikely for at least two years, possibly longer.  However, you may be able to qualify for a federal student loan, since federal law prohibits discrimination against students based on credit factors.

Chapter 13 bankruptcy is also referred to as “reorganization” and it does not discharge all of your debts.  Instead, it provides you with a repayment plan to pay off your debts in manageable amounts and timeframes.  A Chapter 13 bankruptcy will have a negative effect on your credit report, but it does show your willingness to pay your debts rather than to completely discharge them.  This should help you obtain new credit within a year or so.

Many people believe that bankruptcy means you can’t buy a home for at least 10 years.  However, this is not true.  You may be able to get a home loan beginning two years after a Chapter 7 bankruptcy has been discharged, and one year after filing a Chapter 13 bankruptcy.  FHA and VA mortgage loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy.