How does bankruptcy affect my credit rating?

Issuers of credit (like banks and credit card companies) are free to consider the fact of a bankruptcy filing in deciding whether to extend credit. Credit reports may list bankruptcy filings for up to 10 years. Some issuers of credit may decide to extend credit regardless of a bankruptcy. Others may be willing to extend credit only after a number of years have passed, or until the bankruptcy filing is no longer on the credit report.

Some creditors will offer you credit more freely than to other people in financial difficulty because you may not be able to file another bankruptcy for many years to come. For the most part though, for obvious reasons, it is best for you to avoid incurring new debt as much as possible after bankruptcy. Using debit or prepaid cards allows the convenience of not carrying and paying with cash, but without incurring any debt.

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