How long does it take to recover from bankruptcy?

This is a frequent question we hear from our bankruptcy clients. Many imagine that bankruptcy will leave a black mark on their credit reports resulting in a lifetime of denied credit and high interest. As bankruptcy attorneys, we have seen clients rebound from bankruptcy quickly, but we now have data to reassure clients that those rebounds are not a rare occurrence.

LendingTree recently conducted an analysis of loan terms offered to over a million people and compared the type of loans offered to people who had filed bankruptcy in the past seven years to those who had not filed bankruptcy. The data shows that while bankruptcy can make it more expensive to borrow money, it is certainly not impossible to qualify for credit immediately after receiving a bankruptcy discharge. Additionally, if borrowers wait a few years after bankruptcy to apply for loans, they may find rates similar to what other non-filing borrowers are being offered.

The study also found that 43% of people with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. Within two years of bankruptcy, 65% have a credit score above 640.

You can read more about the study here: LendingTree Study.