Life After Bankruptcy

My name is David Tilem. Welcome to our website. We hope that you find this site helpful and educational but NOT overwhelming. If you have any questions about information on the site, please give us a call. We do our best to turn legal mumbo jumbo or legalese into something everyone can understand.

Many people ask me: "What happens after I file for bankruptcy?" They are scared that filing bankruptcy means they will never be able to finance another car, get another mortgage, get a credit card, find an apartment or even get a job. The short answer is RELAX! These are urban myths - not real life problems.

More than anything else, car dealers want to sell cars. The market determines what credit risks they are willing to take, but someone is always willing to provide you with a car loan - that is AFTER the bankruptcy case is over. You may not get the best interest rate, a new Mercedes or even a new car, but you will be able to finance a car.

Home loans are not much different. Fannie Mae and Freddie Mac have guidelines about how quickly, after bankruptcy, you can qualify for a new home loan. The guidelines change from time to time, but the delay generally runs from 2 - 5 years. Most people who file bankruptcy don't lose their homes, so they don't need to worry about getting a new home loan during that time. Many others need 2 - 5 years just to save for another down-payment. Even if you are one of the very few able to buy a new home sooner, there are still other ways to go. You can pay a larger than normal down-payment, or you can get the seller to carry-back a portion of the purchase price. Perhaps your spouse or another family member is willing to be a co-signer. There always seems to be a way - even for those who want to act more quickly.

Credit cards are everywhere today. You need them to rent a car, rent a hotel room or for emergency expenses large and small. Many people file bankruptcy and still keep at least one credit card account. There are no guarantees, but if you do this and you do not have another credit card account with the same lender, many lenders allow you to keep the account. The trick? Pay the account in full and don't use the account in the three months before the bankruptcy case is filed. If you can't do that, then you will probably still qualify for a "secured" credit card after the case is filed. What's that? It's a credit card for a bank account where you have deposited money. As an example, if you want a $1,000 credit limit, the card issuer will ask you to deposit $1,000 into a bank account under their control. You can also become an authorized user on someone else's account. As an authorized user, the credit history on that account helps you rebuild your own credit.

Some apartment building owners do check credit, but most do not. They do it because they are trying to figure out if you are likely to pay the rent on time. Think about it for a minute. Once you have had most or all of your debts discharged in bankruptcy, are you more, or less able to pay your bills? The answer is that it is easier to pay your new bills once your old bills have been eliminated through bankruptcy.

Finding a job should not be affected by filing a bankruptcy. The bankruptcy laws do prohibit employers from discriminating against people who have filed bankruptcy. To be fair, these law are VERY difficult to apply, but most employers don't care.

No one wants to file bankruptcy, but sometimes things just work out that way. You can get a fresh start and expect to live a normal life. The key is advance planning with someone who knows how the rules work. If you need to file bankruptcy, ask your lawyer how many years they have been in practice, how many cases they have filed and whether they are certified specialists.

If you are still worried or if you have any questions about life after bankruptcy, please call the office to schedule an appointment with one of our attorneys. The first meeting for people (not businesses) who are thinking about Chapter 7 or Chapter 13 is free, so let's talk. Let us help you understand how bankruptcy can help you.