One of the biggest questions consumers have when considering filing for bankruptcy is how long does bankruptcy stay on your credit report? The answer will depend on the type of bankruptcy that you are filing. If you file chapter 7 bankruptcy, then the bankruptcy will show as a public record on your credit report for up to 10 years, while a chapter 13 bankruptcy will show as a public record on your credit report for up to 7 years from the date your case was initially filed. With that said, just because you have filed for bankruptcy and it show up as a public record on your credit report, does not mean that you cannot get credit, buy a car or home loan soon after your bankruptcy case is filed. In fact, many consumers who file for bankruptcy, find that their credit scores increase because most of the debts and negative history on a credit report are wiped clean after filing. If you are somebody who has great credit, then it should be expected that your credit score will go down. In my experience, most debtors end up in the 600’s out of 850 post bankruptcy filing.
How Long Do I Have to Wait to Get Good Credit After Filing Bankruptcy?
As discussed above, most consumers filing for bankruptcy, will find that their credit scores may be in the 600’s immediately after receiving a bankruptcy discharge. After a bankruptcy filing you can start rebuilding your credit by using secured credit scores, being added as an authorized user to somebody else’s credit or obtaining an auto loan after filing bankruptcy. It is not uncommon that within a year or 2 you could find yourself with a 700-800 credit score if you actively work on your credit and pay your debt on time moving forward. It is a myth that your credit will be ruined forever if you file for bankruptcy and in fact you don’t have to wait the 7-10 years for the bankruptcy to fall off your credit report either. if you are in an active chapter 13 bankruptcy, you would need to wait until after you get your bankruptcy discharge and complete your plan as you are not allowed to incur new debt while in a chapter 13 plan without court or chapter 13 trustee permission.
How Long Do I Have to Wait to Purchase a Vehicle After Filing Bankruptcy?
You will be surprised to know, that most consumers filing for bankruptcy receive many offers from car dealerships inviting them to come purchase a car right after filing for bankruptcy. These often come in the form of mailers sent right to your home. This is because car dealers know that you cannot file for bankruptcy again for 8 years if you previously filed chapter 7 bankruptcy and want to file again. This is a good risk for an auto dealer and lender that you will make your payments moving forward. With that said, it may take a while for you to get your credit scores up to get the best offers, so your interest rate may be on the higher end if you need a vehicle right after filing for bankruptcy.
In chapter 13 bankruptcy, car loans may be approved by your chapter 13 trustee if you need to purchase a vehicle while in a chapter 13 plan so long as your payments, interest rate and the amount your are borrowing are reasonable.
How Long Do I Have to Wait to Purchase a Home After Filing Bankruptcy?
If you are thinking you may want to purchase a home in the future after your bankruptcy case is completed, you may be pleased to know that you likely will only have to wait 2 years from the date your bankruptcy case was filed. In the case of chapter 13 bankruptcy, many lenders will give you a loan immediately after you complete your chapter 13 repayment plan and your bankruptcy case is closed. If you need assistance purchasing a home or looking for a lender feel free to reach out to symmes law group, as our Seattle real estate broker can assist you with the process.
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If you live in Washington State and want to know what more information about how long a bankruptcy may stay on your credit report in Washington State, give Symmes Law Group a call at 206-682-7975 or contact us to get the counsel you need.
