Many potential clients want to know how long it will take them to rebuild their credit after filing for bankruptcy. It will usually take 2 to 3 years to get a FICO score that would qualify for a large purchase again.  I’ve met several 2008 bankruptcy filers who have already bought homes again in 2010.

If you’re considering bankruptcy, chances are your credit is already suffering.  As this article explains, being 60-90 days late on an account often causes as much of a credit score drop as filing Chapter 7 bankruptcy does.  Within one year of receiving their discharge, most filers should be in the low-to-mid-600s for their FICO score, based on the assumption they have no new negative credit, and open and maintain a $500 “secured limit” credit account with their bank.  This is the type of account that you have a deposit securing the credit transactions, and usually have low limits.  Using that account with timely payments will help you rebuild your credit faster.  Our software projects clients’ scores post-discharge and we give everyone a copy to review with their credit report, and it is common to see 75-150 point increases because of the bankruptcy filing.

So, if your concern over filing bankruptcy in Southern Nevada is because you want to buy another home at the new, lower market prices, don’t worry about that.  Given the lack of growth and the HUGE oversupply, home prices in Nevada aren’t going anywhere soon; prices are projected by most forecasters to be flat for several more years.  For wage earners who want to get another home as soon as possible after getting rid of all of their debt, it makes sense to file sooner rather than later, and shoot for a late 2012 home purchase.

To schedule a free consultation with Attorney Ryan Alexander, call (702) 222-3476.