We filed chapter 7 over a year ago and have been dismissed since June 2010. Now we are needing a car loan around the end of the year. We have no more debt except our home. Our truck was just paid off last month. What should our next step rebuild our credit and prepare to get a car loan and possibly a decent interest rate?
By "dismissed" I assume that your bankruptcy was "successful" - that is, you received a discharge, the estate was administered (that is, if you had any non-exempt property you either repurchased it or surrendered it), and the case was closed. I assume that it wasn't dismissed for another reason, such as failing to submit all the paperwork, etc.
It sounds like you have indeed received your "fresh start" and you can begin rebuilding your credit immediately. While the bankruptcy technically stays on your credit report for up to 10 years your remaining debt account (the home) will be current as you pay. Over time this will raise your credit score. Hopefully you'll get the decent interest rate you are looking for.
I hope this helps. If it does, would you kindly like my answer. You can also always find me by searching florida bankruptcy attorney, bankruptcy attorney in fort myers or bankruptcy lawyer naples.
Best of luck!
Ari Good, Esq. is licensed to practice law only in Florida, Illinois (inactive) and Washington, DC (inactive). Good Attorneys At Law maintains offices in Naples, Florida. The foregoing answer is for informational / educational purposes only: NOTHING IN THE FOREGOING ANSWER MAY BE INTERPRETED AS FORMING AN ATTORNEY CLIENT RELATIONSHIP NOR DOES IT CONSTITUTE TAX OR LEGAL ADVICE. Pursuant to Circular 230, nothing in the foregoing answer may be used for the purpose of avoiding penalties.
There are about a bizillion articles written by some of the fine attorneys here on AVVO (but not myself) on this topic called "legal guides." Just go to the search feature called "research legal issues" and type in credit repair or credit rebuilding. You will find lots of help!
BTW, my Grandmother was from Liberty!
Hope this perspective helps!
"Dismissed" - I'm assuming your case was not "dismissed," but rather, you received a Chapter 7 Bankruptcy "Discharge."
Remaining current on any existing loans, including your home (and any other secured property), is a good way to build your credit.
Another way to build credit is to use credit card(s) (usually, for "big" purchases) and make sure to pay them off immediately (not just the "minimum amount due").
As a side note, Chapter 7 Bankruptcy debtors are typically inundated with credit card offers post Bankruptcy discharge. The reason for this is that debtors have no debt and creditors are aware that the debtor cannot file for Bankruptcy for another 8 years (i.e. debtors cannot discharge debt for another 8 years using Chapter 7 Bankruptcy).
Filing Chapter 7 Bankruptcy remains on a debtor's credit report for 10 years; however, lenders are typically willing to extend credit to people much sooner than that (depends on the client's factual scenario).
Rebuilding credit is an intersting journey. Some assert you do not need credit and rely on a cash basis( Dave Ramsey) In reality you do need to rebuild credit. First stay away from credit repair companies. They are usually a scam. Go to annualcreditreport.com and see what is showing on your reports. You also need something that is reporting positive credit. I suggest a small credit card ot a secured credit card that report to the credit bureaus.
Lenders consider many factors to determine whether to loan money. Your debt-to-income ratio is usually the most important factor.
Filing bankruptcy eliminates possibly all of your unsecured debts reducing your debt-to-income ratio and improving your credit risk in the future. Some financial institutions market to people who have filed bankruptcy. Lenders are in the business to make money by charging interest, not lose money on people who can not pay them back.
Many people have purchased cars almost immediately after a bankruptcy discharge. Many lenders have programs designed for post-bankruptcy borrowers to obtain home financing within a year or two after a bankruptcy discharge. Many people receive credit card offers almost immediately upon receiving their bankruptcy discharge.
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