Bankruptcy's Effect on Your Credit

Federal law allows for a bankruptcy to be recorded as part of a debtor's credit history for 10 years. Whether or not the debtor will be granted credit during the years following bankruptcy is unpredictable. In some cases, it may actually be easier to obtain credit, because potential new creditors may feel that, since the old debts have been discharged, they will be first in line for future payments. They also recognize that the debtor cannot file again for bankruptcy for at least the next seven years.

Debtors can, after bankruptcy, voluntarily pay a discharged debt to a creditor, such as a doctor or hospital, toward whom they feel a special moral obligation or with whom they wish to maintain credit. Such payments are voluntary, do not reaffirm the past obligation and do not create a new obligation.