Call for a free bankruptcy consultation

Louisville |


New Albany |

Schwartz Bankruptcy Law Center

Restoring credit after a Chapter 7 bankruptcy filing

There are many reasons why a person in Louisville might file for Chapter 7 bankruptcy, ranging from credit card debt to medical debt to an underwater mortgage. However, contrary to popular belief, filing for Chapter 7 bankruptcy will not ruin one's credit forever.

While it is true that a bankruptcy filing will show up on one's credit report for a number of years, the impact of the bankruptcy will go down as time marches on. Moreover, a person can take measures to improve their credit in the meantime.

One type of credit to pursue post-bankruptcy is a secured loan from a bank or credit union. A secured loan is usually based on a deposit one has already made. The deposit cannot be accessed while the debtor is still making payments on the secured loan.

A secured loan can also be funded without an upfront payment, but the loan funds will be put in a savings account and will be made accessible only once the loan is paid off. In return for a secured loan, the bank or credit union will send a positive report to credit bureaus about the debtor's payment history.

Similarly, a person can apply for a secured credit card after a personal bankruptcy filing. This type of credit card is buttressed with a deposit, and the amount of credit available is limited to that deposit. Although there can be a high interest rate and annual fees associated with a secured credit card, this type of credit card is meant more to fix one's credit score moving forward into the future, rather than being used on a long-term basis.

Once a person does secure one of these types of credit post-bankruptcy, it is important to make all payments on time and in full. If possible, pay more than the minimum amount. A person should also not let balances get so high that one cannot financially cope with them. However, by being vigilant and responsible with one's new source of credit, it can help rebuild credit in the end.

Source: NerdWallet, "How to Rebuild Credit After Bankruptcy," Bev O'Shea, June 20, 2016

No Comments

Leave a comment
Comment Information
Make A Payment Email Us For a Response

Need A Solution To Your Debt Problems?

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Make A Payment
Schwartz Bankruptcy Law Center

Office Locations:

Louisville Office
3339 Taylorsville Road
Louisville, KY 40205

Phone: 502-785-8549
Phone: 502-485-9200
Fax: 502-485-9220
Louisville Law Office Map

New Albany Office
501 State Street
New Albany, Indiana 47150

Phone: 502-785-8549
Phone: 812-945-9200
Fax: 502-485-9220
Map & Directions