Dealing with massive debt can take its toll on Michigan residents. If all other options fail, you might consider filing for Chapter 13 bankruptcy to lessen your financial burden. You might wonder how long after bankruptcy you can get a credit card; this is how it works.
Chapter 13 bankruptcy
When you file for Chapter 13 bankruptcy, it means you have ample finances to pay off your debt but need more time. A structured repayment plan gives you three or five years to repay your creditors. However, once you have gone through Chapter 13 bankruptcy, the bankruptcy will remain on your credit report for up to seven years.
Credit card after bankruptcy
Because bankruptcy negatively impacts your credit score, it’s wise to check your credit reports first to see where you stand. This can help you determine if everything on it is legitimate and the bankruptcy filing is the only reason your score has lowered. If your credit score was in the excellent range and dropped to the great or good range, you might not have any issues getting a new credit card.
Unfortunately, most people who file for bankruptcy see their credit score dipping into fair or worse territory. In that situation, if you need a new credit card, signing up for a secured card is beneficial. It runs on a deposit of your money and helps you rebuild your credit. Although your credit limit might start as low as $200 or $300, you can gradually increase it with responsible use. Eventually, as you build your score back up, you can apply for an unsecured credit card again.
Once you have repaid your creditors, you can apply for a new credit card. In Chapter 13, this usually takes up to three or five years, depending on the length of your plan.