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Many people have the concern that bankruptcy will ruin their credit for ten years. This is the wrong question. The right question is, “when can I get credit again at a reasonable interest rate?”

The answer lies in a number of factors. One thing for sure, bankruptcy will not ruin your credit for ten years. Though mortgage lending guidelines change regularly, certain government programs allow you into a home a few years following bankruptcy. A conventional bank loan is a possibility five years after bankruptcy.

The biggest factors in credit coming back is income and payments on credit that is reported to the agencies. I have had clients show me paperwork where they obtained single digit interest rates on car loans twelve months after filing bankruptcy.

Is this the standard way it is handled? No. But it does happen.

Though you should not file bankruptcy with the goal of accruing more debt, it is a factor that should be about after leaving bankruptcy. Though debt can be tricky, a good credit score means cheaper car and mortgage payments. This can mean the difference between making it and not making it every month.

If you are located within the State of Arizona, please contact my office to discuss your options.

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