After years of living in debt, you're finally free. After filing for bankruptcy, much of your debt has been eliminated, and you'll find yourself in a position to start rebuilding your life. Your first instinct is that no one will loan you money, because you just charged off most of your debt. When you discover that some companies are willing to extend credit to you, there will be a temptation to go on a buying spree.
Start with the basics when it comes to rebuilding your credit. The most important step you can take in rebuilding your credit is to simply get a firm grip on your money and your expenses. Set a budget, and stick with it. Keep a daily log of how much you spend, and on what. This one simple step can help you see exactly where your money is going, and help you decide if you are spending money on the right things. This will help you quickly gain insight on how to develop good spending habits and essential money management skills.
Soon after your discharge, you will start receiving credit card solicitations in the mail. Most of these will be for secured cards, or for unsecured cards with very low limits. They will generally carry exorbitant annual fees and high interest rates that border on being abusive.
You will also find that a lot of subprime auto lenders are willing to extend you credit for a new or used car, provided that you have a significant down payment. In years past, the first car loan after a bankruptcy was at 18% to 21% interest rate. Those days are pretty much gone, but you will still be charged a premium rate on your first car. All of these offers are not created equal. You should carefully read ALL terms of the offers.
Consider that you just escaped from a horrible debt trap. Do not be so eager to jump back in and repeat the process.
A bankruptcy can remain on your credit report for 10 years if you filed Chapter 7, negatively impacting your score. The high quality (and low interest rate) lenders will take a long, hard look at you before they're willing to give you even a basic loan. If you filed a Chapter 13 bankruptcy, the bankruptcy will remain on your credit report for 7 years, but you have already had to endure the plan for 3 to 5 years.
There's no perfect rule of thumb for how long it will take to repair your credit after a bankruptcy. There is no rule on the best method to reestablish. The only absolute rule is that it takes a combination of paying all of your bills on time AND doing so over a significant amount of time.
There is also no absolute rule about the amount of time before you can buy a house, but current lending guidelines on conventional mortgages require 2 to 4 years before you can get a mortgage. Subprime lenders may be available to you. Again, I caution you about jumping back in bed with subprime lenders with high fees and high interest rates.
I suggest that you look to the old children's fable of the tortoise and the hare. Be the tortoise. Slow and steady wins the race. Establish credit slowly and gradually. Make sure you do not allow debts to balloon out of control again. By demonstrating to lenders that you have learned your lesson, it will only take a few years to return to the preferred interest rates on major purchases such as a home. Small differences in a mortgage rate translate into huge amounts of money. Hopefully a bankruptcy is a once in a lifetime event.