Life after Bankruptcy

We have helped hundreds of individuals and families in Utah get a fresh start from the heavy burden of consumer debt. Naturally, creditors want people to believe that filing bankruptcy is a social stigma that will ruin your life. We often answer questions from people calling about what their lives will be like if they file for bankruptcy.

Here are some answers to many of the typical questions we receive at the Ogden Utah Bankruptcy Attorney:

Credit rating: It is true that credit reporting agencies will give you a lower credit score immediately following Chapter 7 or Chapter 13 bankruptcy. In many cases, however, creditors will consider your credit potential to be higher than a person who is buried in debt and unable to make monthly payments. Remember, in the eyes of a creditor, bankruptcy has freed up your cash flow.

Credit potential: By following some simple guidelines and practices, you can start rebuilding your credit rating immediately after your bankruptcy. One simple practice, for example, is to open a savings account at a local credit union and contributing to it every month. Even $10 each month will build up the amount. Then, borrow against the amount in savings and pay it back in a timely manner. Technically, you will be borrowing back your own money, but you will be rebuilding your credit.

Mortgage and rent: You don’t need to lose your house in bankruptcy, unless you decide that your mortgage is simply too high to maintain. If you give up your house, you will be subject to extra scrutiny by an apartment complex, but most apartments are willing to rent to people with a bankruptcy on their credit report. You will generally qualify for a mortgage loan within a couple of years after a foreclosure or bankruptcy.

Car loans: Yes, you will pay higher interest rates for an auto loan, but most car dealerships will make car loans to people within a year of filing for bankruptcy.

Job opportunities: Except for certain types of financial positions, most employers still do not review your credit history before making a hiring decision. However, the practice is becoming more common for all types of management positions.