A bankruptcy in Hawaii will (unless through an inadvertent twist of fate) appear on your credit report for seven to ten years. And while you will face an uphill climb to re-establish your credit in the years to come, research tells us that this does not mean the end of your credit life for that span of years. In fact, as a Hawaii bankruptcy attorney, I will assure you it is astounding to discover how easy it is ascend to that summit of good credit after filing bankruptcy.
This is primarily due to the fact that after bankruptcy you are, for the most part, debt free and have fewer, if any, competing obligations for a new creditor’s monthly installment. Another factor is that you can’t re-file bankruptcy for four to eight years after your case completes, meaning that you can’t rid yourself of the new creditor for quite a long stretch. Creditors are often warming up their hands at the prospect of how much interest they will generate and for how long without the risk of their debt being eliminated in a second bankruptcy. That is good for many who file for bankruptcy in Hawaii, but there is an important warning there as well.
Obtaining a new credit card after a bankruptcy is not difficult; in fact, many people who file bankruptcy are surprised to receive a flood of credit card and loan offers after the bankruptcy court enters the discharge.
University of Iowa Law Professor Katherine Porter writes that families who have filed bankruptcy appear to be particularly desirable future borrowers. In her article, The Credit Industry’s Business Model for Post-BK Lending, www.ssrn.com/author = 509479), she comments, “Bankruptcy debtors seem to receive more credit solicitations than the general American population. Industry researchers report that the average American gets six credit offers each month. The average bankrupt receives sixteen, nearly three times the number directed to the non-bankrupt family. A carpenter in his mid-30s warned that ‘[o]nce you filed for bankruptcy, lenders come out of the woodwork. . . . They just really try to get you back in debt again. All these offers that I get for financing—before I filed I bet I could not get a loan. The ironic thing is I’m sure, say within the six months before I filed, they would have laughed at me if I wanted to get a loan. Now they are saying ‘let us give you money.’”
“Some debtors are shocked to discover that the very creditor who told them that filing bankruptcy would ruin their credit is now soliciting them as a customer. ‘I am continually getting offers for credit cards. Even the cards that I listed on my bankruptcy still offer me more cards but the interest rates are higher,’ explained a California woman.”
In conclusion, one should feel relieved that after filing for bankruptcy in Hawaii the credit industry will not shun them for the rest of their lives. Maintaining a credit profile leads to rebuilding your credit, and affords a peace of mind in the event of an unexpected emergency. However, hopefully valuable lessons have been learned throughout the process and credit will not be overused in the future to supplement a lifestyle beyond one’s means.