Bankruptcy Myth 1: You will never get credit or own anything again

This is a guest post by Houston Bankruptcy Attorney Adam Schachter.

HOUSTON -- "Most people qualify for new credit cards within months after the successful completion of a bankruptcy. Depending on which bankruptcy you file, you likely cannot get another discharge of your debts for at least 8 years and banks know this.

Another thing to consider is what do we really need credit for? Our opinion is that one should only use credit for the purchase of a house or a car. Post-bankruptcy, the use of a credit card should only be for the purpose of improving one’s credit score: use a card for the basics, pay in full every month and never carry a balance. This way your credit shows that you borrow and pay promptly, while the bank cannot charge you interest because you are paying in full every month.

With respect to a car, so long as you have practically any source of income, someone will loan you money for a vehicle. You will likely pay a higher interest rate but over the life of a car loan, that only costs you a few thousand dollars. Compared to the thousands of dollars of debts you are wiping out in a bankruptcy, this should be a non-issue.

Buying a house is a bit trickier. Home lending has gotten tighter during this awful economy and having a higher interest rate over the life of a home loan could cost many thousands of dollars. If you already have a home, we recommend staying there for as long as you can until your credit improves. If you are hoping to buy your first home, you should try to save as much as possible for the down payment. The more money you have to put down, the more likely you will qualify for a decent loan with better terms. You should then check your scores every year and see if you can refinance.

This is the first in a series of 8 articles in which we help you resolve some common misconceptions about what is and isn’t involved in bankruptcy in Texas.

Check back for future articles.