Concerned About Credit After Bankruptcy? Take a Look at Kodak!

June 30, 2013 5:25 pm Published by

Interesting. Just six short weeks ago I shared a story about the Kodak Company with my Bankruptcy in Indiana readers. You see, every day in the Zuckerberg bankruptcy law offices, we field questions about what life is likely to be like after filing personal or small business bankruptcy. Just about everyone who comes to us needing help to stop foreclosure, payday loan debt help, or student loan debt help wants reassurance on this topic.  Just about everyone poses two questions: What will my life be like after the bankruptcy process is over?  Will I be able to qualify for credit?

I was using the Kodak story from the New York Times to illustrate my answer: Life after filing bankruptcy in Indiana might be different – but in many ways it might be better. In the case of Kodak, the company will still be manufacturing products and providing services, just not the same ones as before. The new Kodak, commentators were predicting, would be more in line with today’s consumer needs.

Now, one of our Richmond, Indiana bankruptcy lawyers called our attention to the latest breaking news about Kodak. Kodak has reached an agreement with three Wall Street banks to borrow close to $900 million to help fund the company’s rebirth as a commercial imaging business once it emerges from bankruptcy.

This followup story about Kodak goes right to the heart of the concern most debtors have when they are considering filing individual bankruptcy in Indiana:  Will I ever qualify for credit again?  Will I be able to refinance a mortgage?  Get a car loan? Get a rental lease on an apartment?  Get a credit card? Open a new bank account?

Ironically, a report from the Consumer Bankruptcy Project reveals that not only is it possible to get credit after filing bankruptcy, it might actually prove easier than in the time leading up to the bankruptcy. The fact is, nearly every debtor receives credit offers shortly after filing bankruptcy. Most of the offers come from credit card companies, but plenty are for car loans and even mortgage loans. Credit card issuers know that, once a person has filed bankruptcy, he or she can’t file again for several years, so they know consumers can’t easily walk away from any new debt they incur, so that makes many willing to issue credit, albeit with higher fees.

Just as those three Wall Street banks are eager to do business with Kodak to help it rebuild after bankruptcy, lenders are willing to do business with individual debtors after they emerge from bankruptcy. Remember, it isn't bankruptcy that "ruins" credit, it's overdue bills. Bankruptcy is the solution, not the problem. I like to emphasize to clients getting ready to file bankruptcy Chapter 7 in Indiana (or to file under Chapter 13 bankruptcy law in Indiana) is that bankruptcy is NOT a credit-killer – it’s meant to be a credit rebuilder!



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This post was written by Mark Zuckerberg

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