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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > 3 Unreasonable Expectations Post-Bankruptcy

3 Unreasonable Expectations Post-Bankruptcy


After completing a bankruptcy filing and having a significant portion of your debts eliminated, you are probably feeling on top of the world. While that feeling is certainly a great one, and it is true that you are finally on the path to a strong financial future — it is important to keep your finances in check. This means remembering that there are some things that you simply will not be able to do right away after having completed the process. Here are three of the most unreasonable expectations after bankruptcy.

1. Having a Good-As-New Credit Score

While it is true that bankruptcy helps repair your money situation, the damage done to your credit score will take some time to be undone. The bankruptcy itself will remain noted on reports for up to 10 years if Chapter 7 was filed, and for Chapter 13 filers it will remain for seven. Strengthening your score will require a conscientious effort to budget and utilize credit responsibly for the next three to five years. It is advisable to apply for a secured credit card to build up your score, but unsecured cards should be avoided completely — at least until your credit score rests above 700.

2. Being Completely Free From Debt

Chapter 13 filers should be aware that even though some debts have been forgiven, the others have simply been reorganized on a payment plan. That means that they will indeed need to be repaid over the next several years. Even those who liquidated assets to have debts forgiven under Chapters 11 or 7 will still be faced with bills to repay, just like everyone else. The highest priority should be placed on repaying these debts responsibly, so that another bankruptcy situation does not arise.

3. Taking Out a Loan

Chapter 13 filers should also be aware that taking out any additional loans post bankruptcy will require permission from the court until all debts have been repaid. Therefore, buying a new car or a home will be difficult, and the latter will likely be impossible for four years. A traditional mortgage cannot be obtained until four years after a bankruptcy, while VA loans are only available after two. If you suffered a foreclosure as well, renting will probably be your best option for some time after filing, so plan accordingly. Otherwise, expect to stay put.

As West Palm Beach bankruptcy attorneys, we want to ensure our clients are prepared for what they will face after filing for bankruptcy. More importantly, we want them to know how to avoid ending up under a mountain of debt in the future. Managing your expectations is key for success post bankruptcy. If you have questions about your own situation, we are always here to provide legal guidance.

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