Bankruptcy

[credit_challenged09]

My 13, if lucky, will discharge within the next 50 days or so..... (i'm not counting    )  can i start applying for secured cards to start ramping up my credit score or should i wait until the discharge?  I've read about the USAA Secured card being an option and I'm a USAA member.

Thanks!

[llecs]

I'd personally wait.

[MovingForward_2012]

I would apply. I also filed Chapter 13 in 2005 with a 5 year repayment plan. I acquired an auto loan in 2008 and a unsecured Orchard Bank card in 2009. The auto loan was approved by the trustee and the credit card did not need trustee approval and I was also approved for the card with a $300 limit. Those two new trade lines helped jump start my recovery tremendously! By the time I was discharged in 2011, I had a credit limit of $1100 on the card and a year later was approved for a Capital One Cash Rewards card with a $2000 limit. The limit was raised to $2500 a couple of months ago. And I now have two more credit cards, a Chase Freedom and a Best Buy store card with limits of $1000 and $2500.

A 5 year Chapter 13 BK is too long of a period to wait to apply for a new credit. People need a car perhaps because one is aging and there are many other factors to why applying for credit before a Ch 13 discharge makes sense. One of those factors is the need to rebuild. The sooner you start, the sooner you will recover after BK 13 discharge.

I wouldn't have closed on a brand new home last month, have a brand new Acura TL with tier 1 lease financing, and 4 credit cards with a total limit of $7100 if I hadn't started the rebuild before discharge by establishing new credit.

Start now!

[hrguy]

I'd wait simply because many 13ers get unsecured cards right out of discharge once the DC is reported.  It is not uncommon for a 13er to have scores in the 700's after DC in a 5 year plan because the BK will be old and about to fall off in two more years, and most of your IIB accounts should have fallen by now.