Rebuild Credit After Bankruptcy

Obtaining relief from your debt is the first step toward getting a fresh start.  I am the only attorney in Colorado to include post bankruptcy credit repair advice as part of my fixed fee. I have direct experience analyzing borrower’s credit worthiness for loans. My first job out of law school was with the US Small Business Administration during which time I helped qualify borrowers for loans and later worked in the loan compliance section. I understand which factors lenders review when approving loan applications. Rebuilding credit is important toward your future success. Your credit score goes beyond creditworthiness.

The clients who follow my advice rebuild their credit much faster than the national average. It is common for my clients to have a credit score in the mid-600s within 12 months after their discharge and to have a credit score in the mid-700s within 24 months after their discharge. Having a good credit score within two years is especially helpful to those who seek to purchase or refinance a home.

Some general guidelines:

  • You cannot start rebuilding credit until after your discharge. That is, you cannot qualify for new debt until your discharge. Further, many creditors will not cancel out the debt from your credit report until after the discharge. You will receive a discharge letter in the mail about 90 days after your case is filed.
    • There is an exception to qualifying for new debt after filing. Certain auto lenders will qualify you for a new auto loan after your case is filed and before the discharge.
  • Once you receive your discharge, set a reminder to contact me 45 days after your discharge date. I will pull a credit assurance report. My time and advice are included in the fixed-fee agreement. You are only responsible for the credit assurance report which is just $50. This is an enhanced report that is unlike the free credit reports you get from the credit agencies.
  • You will be provided a copy of this report, so you can review it for any debts that should have been removed. You then submit any issues through an easy to use online system.
  • Any necessary disputes will be filed on your behalf to the credit agencies. Follow-ups will be made within 30 days to ensure the debts were cancelled. You are then provided a copy of the results.
    • Credit reporting is voluntary. Certain creditors will fail to update your credit report after you receive a discharge. Unless these debts are zeroed out, they will continue to prevent you from rebuilding your credit score.
  • I will review the credit report and offer personalized suggestions on further steps you may take to rebuild credit. There is no one-size fits all solution to rebuilding credit after bankruptcy.

Note: The higher your credit score is prior to filing bankruptcy, the easier it is to rebuild credit. If you can avoid it, do not wait to file bankruptcy until your debts have been charged-off or gone to judgment. The judgements will remain on your credit report after you file bankruptcy although you are no longer personally responsible for the debt. The credit agencies report the fact a judgment was obtained not whether it is collectable.

About judgments, if you own a home, the judgments automatically attach to your home. You may be able to remove the liens through the bankruptcy. Not everyone qualifies. Speak to your attorney if this applies to you.