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Can I Apply for a Credit Card After Filing for Chapter 7 Bankruptcy?

March 22, 2022

Can I Apply for a Credit Card After Filing for Chapter 7 Bankruptcy?

Once you file for Chapter 7 bankruptcy, you must wait until the court discharges the bankruptcy before applying for new credit. However, once the court discharges the bankruptcy, it is like you are starting all over from scratch – it’s as if you have no credit. While the bankruptcy shows up on your credit report, creditors know that you had to take credit counselling courses and do not have a load of debt. Thus, they are more likely to extend credit to you.

Patience Is Key

While it might take a couple of years after the bankruptcy is discharged for a creditor to grant you a conventional credit card, you can start building your credit up again with store credit cards. Additionally, certain credit card companies are known to cater to those who filed Chapter 7 bankruptcy. You might not have to wait for a couple of years for these companies to grant you credit.

Three Credit Card Companies That Work With Debtors After Bankruptcy

The three credit card companies that are known to extend a chance to people who have filed bankruptcy and had the bankruptcy discharged include:

  • Capital One Quicksilver credit card.
  • Open Sky secured Visa.
  • Secured Sable Visa credit card.

All three are secured credit cards, which means that you must have cash in the account to cover your purchases. You deposit an amount to the credit card company, which is refundable. You can make purchases up to that amount.

These cards report to the credit bureaus just as conventional credit cards do. Depending on the card company, you could be considered for a credit line increase as early as six months without having to put down an additional deposit.

The Open Sky card states that almost half of the cardholders improve their FICO scores by 30 or more points in the first three months.

File Chapter 7 or Chapter 13 Bankruptcy with SM Law Group, APC

Many people put off filing for bankruptcy because they believe their credit is ruined forever. However, once a creditor writes off bad debt, it takes less time for the bad debt to fall off than if you were to try to make payments. Most bad credit takes 7 years plus 6 months from the date of the default or the write-off to fall off the credit report.

While a bankruptcy takes 7 to 10 years to fall off a credit report, creditors trust that you have more responsibility after a bankruptcy. They also know that you have little to no credit, so they are willing to take a chance on you.

Contact SM Law Group, APC for a consultation if your credit is out of hand and you need help starting with a clean slate.


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