How many times can I file bankruptcy?

If you have filed Chapter 7 bankruptcy the court will seize all nonexempt assets and sell them, using the proceeds from the sale to repay your creditors. Many debtors have high credit card debts, and it is this debt that is discharged.

So can you get a credit card while you are in the middle of the Chapter 7 bankruptcy? No, but after the bankruptcy is complete there may be a company which is willing to issue you a credit card. Consider, however, your credit score will be very low, and although the creditor may rightly assume now that your debts are discharged you will have more income to repay debts, they will still charge you a high interest rate to protect them from the increased risk of the loan.

What are your options during a Chapter 13 bankruptcy plan? If you have filed Chapter 13 bankruptcy debts are not immediately discharged. In fact, the bankruptcy case will take 3 or 5 years to complete as you make payments through a debt repayment plan. Because the court oversees the spending of any disposable income, they will determine whether you are allowed to borrow money, potentially limiting your disposable income.

What does this mean for you? In most cases the court will decided that you cannot borrow any money until the bankruptcy repayment plan is complete and the court discharges your remaining qualifying debts.

So what is the first step after completing bankruptcy? Rather than running out and trying to get loans or a new credit card, the first step is to begin reestablishing your credit. Although filing bankruptcy can give you a fresh financial start, it will do so by lowering your credit score. The good news is, if you take the right steps after filing bankruptcy, you can begin to raise your score over time.

Financial experts suggest first applying for a secured credit card. This card allows you to make a deposit and use your deposit as a line of credit. Making timely payments on your credit card for a recommended12 to 24 months will raise your credit score and will allow you to qualify for other secured and unsecured loans. Financial experts suggest "it will take 18 to 24 months before a bankrupt consumer, who has re-established good credit, can secure a mortgage loan after personal bankruptcy discharge."

The second step after establishing good credit is to create a budget. Spend less money than you make and have money from your paycheck automatically deposited into a savings account. Bankruptcy filers, who had to file bankruptcy due to poor financial questions and do not make changes in their spending habits, will be the same ones asking two years from now, "How many times can I file bankruptcy?"