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Maria wrote to me and asked the following question.
“Dear Steve,
My hubby and I just filed for bankruptcy and waiting our court date. Im nervous the judge can dismiss our case, but out lawyer says i have nothing to fear. We dont own a home or anything of value except two cars that we are Re-affirming since we’;v never missed those payments.. My husband has been laid off for 19 months (the age of our lil boy) and I was laid off for 6 months til I found another job.. so yes times are tough.. but Im wondering.. I filed so now what?? What happens to our already Low Credit Score ? does it become zero?? and I heard somewhere long time ago that banks are more willing to loan out a mortage to just filed ppl? is this true bc the likeness of foreclosing or filing to bankruptcy wont happen for another 7 years IF possible??.. I feell lost in the aspect that i dont know where to go from here (after court)..All i know is that I’m never using a credit card ever again
I filed for bankruptcy.. where do i go from there? What does it affect?? I dont want a credit card. But we would like to get a house in the next year or two…Please help? Need of Guidance!!
Maria”
Dear Maria,
This is easy for me to say but seriously, relax. Your attorney would not have filed your case if he didn’t think it would be approved.
At this point you are just another cog in a big wheel that will roll through the system. You become nothing more than yet another case number in the system. The people working for your lawyer and the bankruptcy court could actually care less about making any sort of personal judgment about you, they’re too damn busy to worry about that.
If you were behind on your credit before filing, ironically bankruptcy usually increases your credit score. All those old open collection accounts get closed and from this point forward your score can only go up and get better.
But the one statement that you made that concerned me the most was when you said you will never use a credit card again. I felt the same way when I went bankrupt but the crazy thing is that is the worst thing you can do. I know, completely nuts isn’t it!
You see, without some resumption of credit activity your credit report ends on a downbeat. We need to help it recover and raise your credit score so you can get a house but the only way to increase your credit score back to the good range is to use credit wisely and have it reported by the bank to the credit bureau.
You can do this without worry if you use a secured credit card that reports to the credit bureau. Your credit line will be equal to your deposit held by the bank so you don’t have to worry about getting in debt again. If something happened your deposit would pay off the balance.
For more information and links about what to do after bankruptcy, read I Am Bankrupt What Do I Do Now? – Mary
If you have any more questions, just ask them in the comments section of this question and I’ll be happy to answer them for you.