Although most of my Tennessee bankruptcy clients tell me they are not terribly concerned about their credit ratings, most of them eventually get around to asking about how the bankruptcy will affect their credit scores. This question is particularly important when it comes to issues related to renting apartments or replacing a vehicle in the first year or two after filing.
One of my clients asked in the very first meeting if it would be possible to rent an apartment if she had to move shortly after filing bankruptcy. Her job situation made the possibility of having to move a significant issue. However, she had been told by a local real estate agent that the bankruptcy would make getting a new apartment almost impossible. However, that agent must have missed this recent article in the Tennessean.
This article highlights an issue that I think most people overlook when talking about post-bankruptcy credit. That issue is that I don't think the old rules apply any more. The old addage was that, within a couple of years after bankruptcy (assuming you paid all your expenses on time post-bankruptcy), you would be able to get a mortgage. In fact, just a year or two ago, you could get a new credit card fairly easily right after the bankruptcy discharge. However, in today's tight credit market, I really don't think those "rules of thumb" apply anymore. Who really knows what mortgage lenders will be doing in a year or two from now? Who knows how credit card companies will judge credit histories in a year or two? Right now, it doesn't look good, but things could be vastly different in a couple of years.
On the other hand, the Tennessean article points out that there may still be some good news for bankruptcy filers. According to the article, the number of renters is actually dropping. Although it might seem that with many people losing their homes to foreclosure that there would be more renters, not less, the fact is that people are moving back in with their parents, finding roommates, or doing other things that are actually reducing the number of renters. As a result, filing for bankruptcy may not be that big of a problem if you are looking to rent.
The main point is that worrying about your credit rating should be secondary to fixing your debt problem. Having a strong balance sheet (ie: debt to income) may make things better for you a year or two down the road. But I don't think anyone can tell us with an certainty what effect filing bankruptcy will have on your ability to get credit post-bankruptcy. Rather than concern yourself with the credit score, focus on fixing the problem.