Bankruptcy lawyers have suspected for a long time, based on anecdotal evidence, that credit card companies are pretty smart; they're happy to give new credit cards to debtors after the filing, because it's going to be a bunch of years until those folks can file again. Now we're up to eight years.
Now there's a study. The University of Iowa has conducted a study that concludes that credit card companies are offering credit cards to people who have just filed a bankruptcy, without even waiting for the entry of the discharge.
The study also found that almost one hundred percent of those who had filed were offered new credit cards within a year of the filing.
I don't see that as a bad thing.
The debtors have now had the experience of a bumpy economy, so they know that things can go wrong, and they've had mandatory credit counseling by the time they have been offered new credit cards.
Most debtors want to rebuild credit as quickly as they can after a bankruptcy, and many ask me if I'll help them reaffirm on a credit card so they can keep it.
As my loyal readers will know, my routine answer to that request involves the phrase "when the temperature of that place described by Dante in such detail attains the temperature at which water becomes solid", then and only then I'll be happy to help you reaffirm on an unsecured debt.
In fact, loyal readers know that I reaffirm only when brutalized into doing so by a reaffirmation rabid client with weird facts, even with secured debt.
I have historically directed debtors who want to reestablish credit to secured credit cards.
The study from the University of Iowa suggests debtors don't need to go the secured credit card route.
Mind you, I don't know the interest rate being charged on the new post-bankruptcy credit cards.
And the study itself, if I still remember how to link, is located here.
