If you’re thinking about declaring bankruptcy in Indiana, you’re probably worried about what this might do to your credit score. Aside from affecting your ego, a poor credit score also affects your ability to access loans. But what about credit cards? Can you still get a credit card immediately after declaring bankruptcy in Indiana? How long will you need to wait? These are questions you might want to discuss with an Indiana bankruptcy lawyer. 

How to Discharge Debt and Get a New Credit Card in Indiana

If you choose Chapter 7 bankruptcy, you can “discharge” your existing debt and obtain a new credit card within a relatively short period. With this process, you can liquidate your non-exempt assets and effectively “wipe the slate clean.” Once your debts are discharged (forgiven), you can apply for a new credit card. 

The overall timeline may be up to six months. In other words, you may have to spend a few months without a credit card as you navigate the bankruptcy process. If you need a credit card during these six months, you might want to consider options like prepaid Visa cards or Visa debit cards. These function in the same way as normal credit cards, but your credit score and bankruptcy status will not disqualify you. 

Consider a “Guaranteed Approval” Credit Card

Once the bankruptcy court officially discharges your debt, you can obtain a new credit card. Although you might be concerned about rejection due to your credit score, you can specifically target credit card options with guaranteed approval. This is something of a misnomer, as all credit card companies reserve the right to reject you. 

However, you can still find card options with marketing language like “pre-approved” or “guaranteed.” Some credit card companies even market specifically to those who have just emerged from bankruptcy with slogans like “fresh start.” Some options, such as “secured” credit cards, do not involve credit checks. 

Expect extremely low credit limits at first (probably a few hundred dollars). You will also struggle to access notable benefits during the first few months after bankruptcy. That being said, it is still important to obtain a credit card after you emerge from bankruptcy. The sooner you start rebuilding your credit, the sooner you will be able to “graduate” to better credit cards with higher limits and better benefits. 

According to certain sources, you can completely rebuild your credit score in just a few short years after bankruptcy. While a bankruptcy filing remains on your record for up to a decade, this shouldn’t become a major barrier if you rebuild your credit score effectively and responsibly. 

Can a Bankruptcy Lawyer in Indiana Help Me?

Concerns about accessing loans and credit cards after bankruptcy in Indiana are completely normal. Although it’s true that bankruptcy will affect your credit score, you can probably “bounce back” in a relatively short amount of time. In addition, you can probably obtain a “guaranteed approval” credit card immediately after declaring bankruptcy. Discuss your options in more detail with Christopher L. Arrington, Attorney at Law.