A friend of mine who is going through a bankruptcy, due to a divorce, asked me if he’ll ever be able to get credit again!

My simple answer to him was, “Yes, of course!” How, you ask? Well, a number of banks are now offering “secured” credit cards where a debtor puts up a certain amount of money (as little as $200) into an account at the bank to guarantee payment. Usually the credit limit is equal to the security given, and is quickly increased as the debtor proves his or her ability to pay on the debt. Two years after a bankruptcy discharge, debtors are then eligible for mortgage loans on terms as good as those of others, with the same financial profile as those who have never filed for bankruptcy.

The size of your down payment and the stability of your income will be much more important than the fact you filed bankruptcy in the past. Although the fact that you filed for bankruptcy will stay on your credit report for 10 years, it will become much less significant the further in the past the bankruptcy date is.

After telling all of this to my friend, I then mentioned obvious fact: he was probably much less of a credit risk after his bankruptcy than before it, when he was struggling to pay all of his growing bills”. This made his extremely hopeful for the future.