Incurring Debt while in Bankruptcy
Filing a Bankruptcy is a negative thing to do, But people filing a bankruptcy already have bad credit. After filing a Chapter 7 bankruptcy you are now able to start rebuilding your credit the next day. Within several months will receive credit card offers and new car sale offers. The offers will be at higher interest rates. If you take the offers be sure and always make the payments this is how you will rebuild your credit by buying things. I have seen people’s credit rating back in the 700 two years after the filing of the chapter 7.
A Chapter 13 bankruptcy is a little harder to explain because while you are in the 3 to 5 year plan you don’t really have credit because you are not allowed to incur any new debt while in the plan without permission. This does not mean you can’t buy a car or house. You can buy, you have to receive permission from the courts to incur the debts. We had a client the other day buy a house after two and half years, they have a 8 percent fixed loan.The chapter 13 does fall off your credit three years sooner than the chapter 7 which also helps to rebuild your credit that much quicker.
If your credit is bad or there is a major change in your income you should talk to a bankruptcy attorney to see how the bankruptcy laws could help you.
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