One of our chapter 13 bankruptcy clients recently completed her chapter 13 plan, and she had paid her chapter 13 plan payments and her house payments on time throughout her chapter 13 case.
She checked her credit scores last July, in the 55th month of her plan, just to see what they were, in anticipation of getting a loan to buy a vehicle once her plan was completed.
She was surprised to see that her credit scores were Equifax 714, Tranunion 658, Experian 704. These are very good credit scores, particularly for someone in an active bankruptcy case! You qualify for the very best interest rates when your scores are 720 or higher. And the client had not even received her discharge in bankruptcy yet!
Following one of our clients receiving a discharge, we do a "credit clean up" which can boost a client's credit score even further. We make sure all of the "tradelines" or individual creditor listings, show -0- if they were discharged in the bankruptcy. Many attorneys do not take this important step, which helps clients get the fresh start that they need to get back on their feet credit-wise.
But to recover good credit scores quickly, it is very important to pay any new debts on time, after a bankruptcy is filed. When reviewing my clients' credit reports after a bankruptcy, I see where sometimes people have defaulted on cell phones, or have medical collections (after their bankruptcy was filed) or have failed to pay other new debts that they took out during their bankruptcy.
If you default on new debts after you file bankruptcy, you will have a difficult time recovering good credit. But if you pay timely, like my recent client did, you should have no trouble re-establishing great credit.
Have you had an experience concerning getting credit or improving credit scores during or after a bankruptcy? If so, please add under comments below. Thank you!
