Hi. My name is Mike Greiner and I’m a bankruptcy attorney for a financial law group located here in Warren, Michigan. Our phone number is 586-693-2000 and our website is financiallawgroup.com. And I’m here to talk to you today about rebuilding your credit after you file bankruptcy. The concern a lot of my clients have is how long it’s going to take them to rebuild their credit after they file bankruptcy and that’s a valid concern. In many cases if you have very good credit your credit will be hurt by filing bankruptcy. But the good news is, your credit bounces very, very quickly back from the bankruptcy.

I’ve seen a lot of clients within a year or two of filing bankruptcy have their credit bounce back to levels that were higher than they even had before they filed, and that’s a really big surprise to my clients. Many of my clients ask me how long it’s going to take for them to be able to get a car loan. The truth is that, a car loan,you’ll typically be able to get very quickly after filing bankruptcy. Whether you file chapter 13 or chapter 7 bankruptcy. There are a number of dealerships that we’ve had a good experience with in terms of actually financing people as they’re going through bankruptcy.

One example is Avis Ford which is located in Southfield. And they’ve done a good job in terms of financing people. There are a number of other ones and we can suggest that to any of our clients as they’re going through this process. The one cautionary note that I would provide, is that if your in a chapter 13 bankruptcy, you actually need to get permission from the bankruptcy court before you can finance a vehicle as you’re going through that process. But that’s the type of thing that we can help you with, and certainly dealerships like Avis Ford for example have a good track record of knowing what to do in getting us the information that we need in way of going to the court to request permission for you to go ahead and finance a vehicle as you’re going through the process. People often ask me how long it’s gonna take for them to get a mortgage after filling bankruptcy. The old rule used to be about 2 years.

The problem is right now even if you have very good credit and you have a lot of equity in your home, the banks just aren’t lending. So we’re kind of in uncharted territory right now. I can tell you though that a lot of my clients have had good success working on alternate financing arrangements, doing things like land contracts or lease to own arrangements. A number of those arrangements that worked out very well for people even very soon after filing bankruptcy and especially in this day and age where homes just aren’t selling if you’re waiting for mortgages, there are more opportunities out there for alternate financing arrangements where people are looking for them. So that’s what I usually suggest to people.

With respect to credit cards- it’s amazing how quickly you’ll get in the mail, credit card offers. At the beginning, they will not be very good interest rates. They will typically have certain fees associated with them. And they will typically not be a very large balance is available to you. But you don’t care, because what you’re trying to do is rebuild your credit, and the way to do that is just charge a little bit each month. Pay it off on time each month and as you do that, every month you do that with two or three credit cards, especially, your credit score will get better. If for some reason you do not get credit card offers in the mail very quickly which is unusual, but it does happen, if that does happen you can look at gas stations as good opportunities to get a credit card because many of them are in the business of selling gas as opposed to the business of providing credit. I’ve seen that Marathon’s a good example for that.

Another example that I’ve has worked well is what are called secured credit cards. Secured credit cards and if you google secured credit cards you’ll see a bunch of them pop up, the secured credit card is a credit card where you give them like three hundred dollars and they’ll let you charge up to three hundred dollars. It’s not a pre-paid credit card, like you get from 7-11. It’s not a debit card like what you get from your bank. It’s a real credit card, it’s just that they hold onto the money in case you don’t pay and again, the strategy with those should be just charge a little bit each month and paid off on time each month, so you do that your credit score is going to get better. Those work very well in terms of rebuilding your credit.

I can recommend one more website to help rebuild your credit it’s a website called Credit Karma, creditkarma.com. It’s a website that I use actually personally because I find it very helpful.  There are a lot of ads out there for getting your credit report and your credit score for free, and most of those web sites are actually not free despite all the singing and the dancing that they have on them. There’s charges for you to be able to do those things and I don’t recommend them. What I do recommend though is, again, is creditkarma.com because that is free. But the way that creditkarma.com works is that they actually make their money off of advertising.  Where what they will do is look at your credit score and look at your credit history, and then suggest certain products that might work well for you based upon that. They may include secured credit cards, they may include unsecured credit cards, and they’ll give you the best deals that really are out there. You don’t mind about the advertising because what your goal is is to find possibly some credit cards that will work under your circumstances, and if you’re interested in that, creditkarma.com is a great place to go for some suggestions in that regard.

I think that in most cases, most of my clients are very surprised at how fast their credit score bounces back.  I think that that really shouldn’t be a concern for people as they are thinking about going through bankruptcy. The truth of the matter is if you have to go through bankruptcy, you have to do it, you don’t have a lot of choices. It’s the best way to get rid of your debt.  Let you live a life where you’re able to take care of your family, and take care of yourself, and not find yourself overburdened in debt. And if that’s the concern, don’t worry about the credit will bounce back. If you want to discuss your bankruptcy options, or rebuilding your credit after bankruptcy as well.  Please feel free to give my office a call. I offer free consultations. My phone number is 586-693-2000, and my website is financiallawgroup.com.