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Despite the persistent denials credit card companies, credit report
analysts do not necessarily distinguish between Chapter 7 liquidations
cases and Chapter 13 repayment plans. In practice, the effect of the
dread term "filed bankruptcy on ..." has an equally odious impact upon
credit availability. Nevertheless, after filing, late payment reporting
should stop, which by itself, is responsible for an almost immediate
course of recovery.
After filing, the worst effect is over, and steady payment histories
overcome past history in as little as 18 months. Based on previous poor
credit and no loan availability before filing, many debtors enjoy new
options for additional loans fairly quickly. Lenders loath to accept
bankruptcy, but once over, seem inescapably attracted to new potential
customers.
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