Your credit score is extremely important in many different ways. Everyone likes to have spending power, and you are definitely going to be limited if you have credit woes. The lack of financial freedom can be disheartening, but the damage can cut much deeper. Renting an apartment can be difficult if you have a very poor credit score, and you may even be precluded from consideration for certain jobs if your credit is not up to par.
It can seem like a bankruptcy filing is just going to make a bad situation worse if your credit is taking hit after hit, but this is not necessarily the case. While it is true that a Chapter 7 bankruptcy will remain on your credit report for 10 years, you can start to rebuild your credit right away if you are a homeowner. If you file for a Chapter 7 bankruptcy, and you have a mortgage on a home with limited equity, you can maintain ownership of the property (if you are up to date on the payments). The same thing is true for your car. If you continue to make these payments in a timely manner, your responsible behavior will have a positive impact on your credit going forward.
Many people are surprised to find out that they can in fact get credit cards with low limits after they file for bankruptcy. In addition to the low limits, there may also be rather high annual fees, and interest rates will be high. If credit card usage got you into trouble in the first place, you may be reluctant to try to obtain lines of credit after you have successfully filed for bankruptcy.
This makes sense on the one hand, but on the other hand, if you can get credit extended to you, and you act wisely, your score will improve over time. In addition to credit cards, if you don’t own a home, after a couple of years you may actually be able to qualify for a mortgage. A motor vehicle loan may also be available to you after bankruptcy, but you should be prepared to pay a high interest rate, and a significant down payment may be required.
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If you are in Portland, Salem, Eugene, Medford or any other city of significant size in Oregon, we have a bankruptcy law office near you. We offer free initial consultations, and you can set up an appointment right now if you call us toll-free at 1-800-682-9568.