One of the issues that people considering bankruptcy often worry about is that they will never get credit after filing a Chapter 7 or Chapter 13. That, or the fact that the bankruptcy will stay in their credit report for 10 years from the filing, which fact would serve as warning to future creditors that you might turn out to be a bad risk. But neither is true, however. While a bankruptcy will indeed stay in your credit report for ten years, it does not necessarily mean that you can no longer get new credit.

Furthermore, only a Chapter 7 bankruptcy will stay in your credit report within 10 years. If you filed under Chapter 13, the period is shorter – about five to seven years. Worst case scenario: You can get a new loan but with high interest rates or fees. Now, that’s not so bad, is it? Especially after considering that even people with good credit can get bad loan deals. The fact remains that no matter how bad or good your credit line, it is not a guarantee that you are going to get approved for a loan or get low interest rates. In other words, a bankruptcy may damage your credit but only to an extent. It does not necessarily mean that you will never qualify for a new credit. What damage there is, you can always rebuild. And that is what you should be focusing on, instead of wallowing in the pits of Credit Doom.

#1 CAN DO: Keep a Credit Card out of the Bankruptcy

When filing for bankruptcy, the rule is that you have to make a schedule. A schedule is a list of all assets and liabilities that you are required under the law to disclose before a bankruptcy case could commence. If you owe money on a credit card at the time you file for bankruptcy, you have to include that in the schedule. Otherwise, you may be sued for perjury and penalized under federal law. What’s worse, if you fail to disclose unpaid credits like this, you may be denied discharge of all your debts.
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