Credit Offers After Filing for Bankruptcy?

July 20, 2016

Credit offers after filing for bankruptcy?   Yes, you will likely receive several credit offers after filing for Chapter 7 bankruptcy.  Recently, one of our clients volunteered the above photograph of how many automobile credit offers he received after filing for bankruptcy.   He quickly trashed them thereafter!  Credit offers surprisingly do come right after filing for bankruptcy.  They can be a good thing or bad thing after you file for bankruptcy.

Credit Offers after Bankruptcy: My Credit Was Not Destroyed by Bankruptcy?

Nothing proves the fact that your credit was not destroyed by bankruptcy greater than receiving innumerable credit offers after your bankruptcy filing.  Remember, bankruptcy many times can be the start to rebuilding your credit.  If you had “F” credit before you filed for bankruptcy, your credit ability will instantly increase after filing.  If you had stellar “A” credit, your credit ability will obviously decline.   I usually like to express after-bankruptcy-credit by saying that you have “C” credit.  (Note – this is all for illustration purposes only: you are not actually in A to F credit grading system).

How much can “C” credit get you?   It certainly appears to get you automobile offers and sometimes small balance credit lines.   It also many times revives the ability to enter a residential lease to rent a home or apartment.   It appears that “C” credit can get you the “essentials” on credit.   But do you want to buy the essentials on credit?   Can you afford the higher interest rates they may be offering?   Be careful jumping back into credit situations just because of piles of credit offers you may receive.

Credit Offers and Bankruptcy: Which Offers Should I Consider?

Credit offers after bankruptcy should generally be ignored.  You should pursue very few of them.   Any offer that you do pursue should be geared toward responsibly rebuilding your credit.

We have seen numerous times when a new automobile loan eventually failed when it was purchased directly after filing for Chapter 7.   In fact, purchasing automobiles (even brand new automobiles) directly after filing for Chapter 7 causes many of our client to return to our office a short time later to file a Chapter 13 case or a subsequent Chapter 7.   The best way to guarantee a return to bankruptcy court is to immediately pursue credit opportunities.   You must change your approach to incurring new debts if you want to avoid a future bankruptcy filing.

Any credit offers you consider must be capable of rebuilding your credit in a responsible and manageable manor.  If you take on too much debt, you will likely fail regardless of your motives.   We strongly recommend that you only pursue light credit responsibilities and set up automatic payments to ensure that the payments are always made on time.   Live under your means and develop a paid-in-full mentality to your finances.  Credit should only serve you, you should not serve credit!  Therefore, use only light credit only to make sure that your credit eventually fully recovers.

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