Having a bankruptcy on your credit report will not prevent you from being able to borrow. It will be something you will have to explain to lenders as long as the bankruptcy remains on your credit report (usually 10 years). However, banks understand that by having discharged your debt in bankruptcy, you will likely now have the ability to pay your new loan. Banks also know that you are prevented from filing another bankruptcy for 8 years after you get your Chapter 7 discharge. In the bank's eyes, you may be a better credit risk after having obtained a Discharge in bankruptcy.

Of course, a bankruptcy is not a favorable notation on one's credit report. However, someone considering bankruptcy usually has a credit report that looks pretty bleak. Filing bankruptcy will give you a fresh start and enable you to begin rebuilding your credit. Right after obtaining your Discharge, if you are working or have other income, you will be able to obtain a credit card or even a car loan. Several of my clients have even obtained a home mortgage as little as a year after obtaining their Discharge. Many of these individuals would not have been able to obtain this credit without having gotten rid of their old debt by filing for bankruptcy.