Many lenders have a vested interest in discouraging people from filing for bankruptcy and as a result go out of their way to describe bankruptcy as your personal financial “Armageddon” and to make the consequences sound as dire as possible. While it is certainly true that filing for bankruptcy will complicate your credit situation for the next ten years and may result in other negative consequences, in reality it is nowhere near as bad as many lenders try to make it out to be. In most cases – assuming you are very careful about your credit after the bankruptcy – you can have pretty decent credit scores within two years of your case being discharged and even be in good enough shape to apply for a home mortgage loan.

By law, once you file for Chapter 7 bankruptcy and your case has been concluded, you cannot file again for eight years. This means if you immediately sink back into debt, you have no recourse to the bankruptcy courts for relief until this time period is up. As a consequence, many predatory lenders are likely to immediately begin offering you unsecured credit cards – at very bad rates and under strict conditions – almost as soon as your case has ended. This is basically just a trick to get you back into debt very quickly since you will not be able to have it discharged again until your eight year period is up. Although these cards are usually scams designed to put you in debt again, you can possible use these offers to help begin rebuilding your credit by accepting one of the offers and making your monthly payments on time and paying off the card in full each month. Having revolving credit – like a credit card – is one of the best ways to rebuild your credit.

Another popular option is to get a secured credit card as soon as the bankruptcy is over. A secured card works very much like a debit card in that your limit is determined by the amount of money you have on deposit with the company. However, you will be expected to pay fees and make monthly payments and a secured card does count as revolving credit on your credit report. Further, since your limits are defined by the amount of money you have on deposit, it is impossible to overspend or begin generating new debt. This makes having a secured credit card one of the most popular methods of building credit for people with none and for rebuilding credit in the wake of a bankruptcy.

One should be aware that post-bankruptcy payments will have a much more dramatic impact on your credit score than was probably the case back when you were in good financial shape. This means that any late payment or partial payment after your bankruptcy will be taken far more seriously and will have much longer lasting effects on your individual credit scores. Therefore it is of vital importance to ensure that all of your post-bankruptcy payments are made on time and in full. By doing so, you can begin rebuilding your credit immediately after a bankruptcy and be in decent shape within a couple of years.