Filing for bankruptcy can feel like the end of a long, exhausting process, but it’s also the start of a new financial chapter. Once you’ve filed, you may have questions about how bankruptcy affects your credit and what steps you can take to move forward.
CNBC Select spoke with Leslie Tayne, a debt relief attorney, about what to expect after filing, which financial mistakes to avoid and how to start rebuilding your credit.
What happens after bankruptcy?
What happens to your debt after you file for bankruptcy?
After a bankruptcy discharge, qualifying debts are legally cleared, meaning you’re generally no longer personally responsible for paying them. However, not all debts qualify, and certain liens may remain. In Chapter 7, a discharge typically comes a few months after filing; in Chapter 13, it generally follows completion of the repayment plan.
Bankruptcy also remains on your credit report for up to 10 years from filing for Chapter 7 and seven years for Chapter 13. It can lower your credit score and make it harder to qualify for credit cards, car loans or a mortgage, or mean paying higher interest rates. The impact varies, but bankruptcy doesn’t prevent you from obtaining credit forever. With time and responsible financial habits, you can begin rebuilding your credit and expanding your options.
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What to expect in the first year after filing
“The first year after filing for bankruptcy should be about prioritizing financial stability,” Tayne says. That means adjusting to a budget, rebuilding savings and learning to manage credit responsibly, including “unlearning financial habits that didn’t serve you.” Because qualifying for new credit may be more difficult at first, she recommends focusing on paying bills on time, keeping spending manageable and avoiding unnecessary new debt.
“The first year can be financially disheartening, but bankruptcy provides a fresh start,” she says. “Just keep in mind that recovery takes time, and stay the course.”
It’s also important to know that bankruptcy doesn’t eliminate every debt. “Some debts simply aren’t dischargeable or can survive bankruptcy,” Tayne says, pointing to student loans and certain tax debts as examples. Whether these obligations can be discharged depends on the circumstances and applicable legal requirements. Talk with your bankruptcy attorney about which debts will be cleared and which you’ll still need to repay.
What to avoid after bankruptcy
Taking on new debt before you’re financially ready is one of the biggest mistakes to avoid, says Tayne. Many people receive new credit offers after filing for bankruptcy and may be tempted to start spending again before they’ve established a stable financial foundation. Instead, focus on managing expenses, building an emergency fund and ensuring that any new credit is affordable.
For some people, getting back on track may also mean reducing major expenses, such as housing costs. Moving somewhere with lower rent can free up money each month, although it’s important to weigh potential savings against moving costs and other practical considerations.
If overspending contributed to the original debt, developing healthier financial habits can help prevent future financial problems. However, bankruptcy can result from many circumstances, including job loss, medical bills or other unexpected expenses. As Tayne points out, shame and avoidance can make it harder to ask for help, but reaching out to a reputable financial counselor or other qualified professional can be an important step toward rebuilding financial stability.
Apprisen
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Highlights
Founded in 1955, Apprisen offers budgeting workshops, debt management plans, credit counseling, housing seminars and bankruptcy education in person and online. Clients can subscribe to the financial health platform Propel to gain on-demand access to certified financial coaches and exclusive budget tools.
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Minimum debt
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Fees
Vary by state but will never exceed $45 one-time setup fee and $45 monthly fee.
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Availability
Operates in all 50 U.S. states and Washington, D.C.
Pros
- Setup and monthly fees capped at $45 each.
- Operates nationwide
- First-time homebuyer guidance.
Cons
- Clients must close any enrolled credit cards.
- Doesn’t settle debts for less than the outstanding principal.
American Consumer Credit Counseling
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Highlights
In business since 1991, ACCC offers debt management plans, financial education, bankruptcy counseling and other services. According to the company, clients collectively paid off $248 million in 2025 alone.
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Minimum debt
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Fees
One-time $39 enrollment fee and $7 monthly maintenance charge per enrolled account ($70 maximum)
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Availability
All 50 U.S. states and Washington, D.C.
Pros
- Offers guidance on student loan debt, retirement, ID theft, budgeting and more
- Has counsellors who specialize in military personnel.
- CreditU mobile app features budgeting tools and lets you track your debt.
Cons
- Monthly fee charged per account, can reach $70
- Not all creditors accept proposals for debt management plans.
- Clients must close any enrolled credit cards
How to start rebuilding your credit after bankruptcy
Rebuilding your credit after bankruptcy takes time, but consistent financial habits can help you make progress.
Pay your bills on time. Start by keeping up with bills and financial obligations that remain payable after bankruptcy. “It takes savvy budgeting and perseverance,” Tayne says. You may need to adjust your living expenses to make room for essential payments and avoid falling behind.
Get credit for bills you’re already paying. Experian Boost* is a free tool that lets you add eligible on-time payments for expenses such as phone bills, utilities and certain streaming services to your Experian credit file. These payments typically aren’t included in traditional credit scoring, but adding them could help improve your score. Experian Boost won’t erase the impact of bankruptcy, and results vary: some users see their scores increase, while others may not see a change.
Experian Boost®
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Cost
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Average credit score increase
13 points, though results vary
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Credit report affected
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Credit scoring model used
Results will vary. See website for details.
Check your credit reports for errors. Review your credit reports from Equifax, Experian and TransUnion to make sure the information is accurate and that debts included in your bankruptcy are reported correctly. If you find errors, dispute them with the credit bureau reporting the inaccurate information and, if appropriate, the company that supplied it. Correcting inaccurate information can help ensure your credit reports reflect your actual financial history. You can check your reports for free at AnnualCreditReport.com.
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Do the math before taking on new debt. Whether you’re considering a new credit card or a loan, make sure the payments fit your budget before committing. Consider the interest rate, fees and total repayment cost, too. Building a realistic budget and sticking to it can help you manage future borrowing responsibly, Tayne says.
Understand how Chapter 7 and Chapter 13 can affect your recovery. Chapter 7 and Chapter 13 bankruptcy follow different processes, which can affect how people rebuild their finances. “Chapter 13 usually involves a repayment plan, which can take three to five years, and that alone is draining,” Tayne says. Ultimately, your financial recovery depends on several factors, including your income, essential expenses, payment history and how consistently you manage your budget moving forward.
Is your financial life over after bankruptcy?
“It’s so common for consumers to think that once they file for bankruptcy, their finances will never get back in order, or that it’s an easy way out,” Tayne says. “This isn’t true.”
In her 25 years as a debt attorney, Tayne says she’s seen many clients file for bankruptcy and go on to achieve financial success. But rebuilding takes time. “It’s not a wipe and go but a rebuilding process. It takes discipline and commitment,” she says.
Take things one step at a time. Focus on managing your expenses, paying your bills on time and avoiding new debt you can’t afford. With patience and consistent financial habits, you can work toward a more stable financial future.
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Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority, grounded in relevant training and experience. For this story, we interviewed Leslie Tayne, a debt relief attorney at Tayne Law Group.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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