Government records indicate that over a million people and businesses filed bankruptcies in 2013. A consumer filing in Arkansas and elsewhere entails an individual or a married couple entering a petition for relief with a federal bankruptcy court. They get rid of or reorganize primarily consumer debts in either a Chapter 7 or Chapter 13 filing. The interesting but perhaps little known aspect of a bankruptcy is that the filers can rebuild their credit standing fairly quickly after the bankruptcy is finalized.
Despite the fact that large amounts of debt may be eliminated by an individual or married couple, they may obtain credit cards and other types of credit-reportable accounts almost immediately after the case is final. For instance, a person with a bankruptcy on his or her record can always start off again by obtaining a secured or prepaid credit card. These require money put up front to cover the purchases but they are reportable as credit-worthy events to the three national credit bureaus.
There are online services and books written by recognized authorities that can steer you to the best and most reliable of the companies that issue credit cards to those with bankruptcies. Furthermore, in a Chapter 7, although large amounts of unsecured debt are being eliminated, sometimes the debtors retain and keep paying on a home and one or more cars. Those accounts are not affected by the bankruptcy.
The home mortgage and car loan payments will continue to be reported as paid on time, even after a bankruptcy has been filed and completed. Thus, with such accounts and a prepaid credit card, a married couple or individual filer in Arkansas can be well on their way to re-establishing a responsible credit score shortly after the case ends. Although bankruptcy filings may continue to be reported for several years, that is not a fatal entry in one's record. As new accounts are reported as being paid on time, it often happens that the bankruptcy filing is no longer reported, even before the maximum reporting period has been reached.
Source: The Huffington Post, "How to Rebuild Your Credit After Bankruptcy -- Fast", Curtis Arnold, Oct. 15, 2014