Home » Blog » Credit Improvement » Restoring Credit After Bankruptcy
How to Restore Your Credit After Bankruptcy

Restoring Credit After Bankruptcy

Restoring your credit after bankruptcy can be surprisingly easy if you follow this advice.

Bankruptcy can be a traumatic experience. Restoring your credit after bankruptcy can be surprisingly easy if you follow this advice.

It was my great pleasure to have this in-depth discussion with Same Parker of www.mycreditguy.com about quickly getting back on your feet after a bankruptcy.

The number one reason why people have bad credit after a bankruptcy is because they don’t understand how to build good credit.

Building good credit is as easy as knowing how to play the game, and purposely taking following the rules of the game.

The Interview

Sam Parker is the owner of MyCreditGuy.com, a credit restoration company that specializes in working with loan officers to help consumers qualify for a mortgage loan.


Sam is one of the most ethical and education people I know around the topic of credit restoration.

In this interview, we dive deep into what could prevent you from recovering faster after a bankruptcy, and how to set yourself to qualify for a mortgage as soon as you meet the waiting period guidelines.


Scott: Alright, thank you everybody for being here. I have a special guest today. I have Sam Parker here today from MyCreditGuy.com. You want to know who your credit guy is, my credit guy is Sam Parker. How are you doing today, Sam?

Sam: I’m really good Scott, thanks a lot for having me.

Scott: Yeah, no, absolutely. So you know, if this is the first time you’ve watched one of our videos or seen one of our Facebook lives, what we do at find my way home is, our goal is to expose consumers to experts in the industry.

Sam, I consider a very much an expert in our industry, in an industry that can be pretty shady. I mean, I think I join that, I mean I joined that because I’m in the mortgage industry, in the mortgage industry, credit repair guys, car dealers, we kinda get swarmed into this little group, but there’s a reason for that.


The reason for that is that people are out there, that aren’t looking out for your best interest.

I’ve known Sam for a couple of years now. I’ve sent clients over to him, a really, really good friend of mine, you actually helped–we joke about it all the time now.

He and I were sitting in a fundraiser, and he was like, “I want to buy a house,” and he had low 500 credit scores at the time, and I sent him over to you, and it took him a while to kind of get with the program.

But last year, he bought a house, his credit scores are now over 700 and he bought a house, just this year in Orange County in California. So he brings that up to me all the time.

So you know, Sam and I are going to do a handful of these videos because I think there’s a lot of misunderstanding, there’s a lot of misconceptions. There’s just a lot of bad information and advice out there about credit.


Now, within the context of our conversations, I’m a mortgage broker, I work with a lot of people that have credit challenges that are trying to buy a house. So that’s kind of going to be the theme of some of this conversation, but this is general credit knowledge, know-how, tips, tricks, strategies.

This is everything you need to know.

Let’s cut to the chase here, Sam, you sent out a video the other day, and I think you call that, Life after Bankruptcy, and how to, what you need to do with your credit after bankruptcy.

This is a topic that is very near and dear to my heart. We have helped thousands of people that have bought homes after bankruptcy, foreclosure, short sale, deed and lieu.

I see this pattern over and over again of people file bankruptcy. And guess what, I don’t want to touch my credit anymore because that’s what got me into the situation in the first time or on the first place.


More often than not, people don’t have bad credit, they haven’t learned how to build good credit. So I had a bankruptcy, Sam, what’s next? Is there hope for me?

Sam: Yeah, absolutely. And people need to quit looking at it like it’s a financial death sentence because it’s the opposite of that. It’s a financial rebirth as long as you treat it like that, that’s what it’s there for. So you know, I try to always kind of relate things so that people can understand.

It will be like if you were in really bad shape, somehow snapped your fingers, spent 15000 bucks, all of a sudden you were in good shape, you wouldn’t say, I’m not gonna eat anymore.

You wouldn’t say, I’m not gonna work out or use my body anymore. You would just do it wisely going forward.


It’s the same way with your finances, you know, after a bankruptcy, it’s not the time to clamp up and do nothing. It’s the time to do it the way that you should have the first time around.

So you know, just so that everybody understands kind of how the whole process works, if you don’t mind me backing up a little bit into the bankruptcy because we have some people too that are ashamed to go that route.

So first of all, what I wanted to do is remove the stigma from that.

There’s a reason that there’s bankruptcy laws in place, and it’s to give good people a fresh start. It’s to give people that made mistakes, a fresh start. It’s to give people that had lots of medical bills a fresh start.

It doesn’t matter, quit judging yourself because it’s just there for a purpose, and so when I ask people if they’re considering filing a bankruptcy, but they’re on offense about it, because of pride issues, I say, “How productive of a family member are you being right now to your kids, to your spouse, how productive of a community member are you being?”

The answer is not very productive in either sense because you’re drowning in debt, that’s all you’re thinking off, it’s running your life. So you go out, usually, if hopefully you can qualify for a chapter 7, and chapter 7 is a total elimination of all debt, that’s not government backed or reaffirmed.

Reaffirmed just means that if you have maybe a car loan that you’re like, no, I mean, I’m good on that, I don’t want it to be included in the BK, then you can keep that out in some cases. Chapter 13 bankruptcy means that you don’t owe enough money or that you make too much where the court is not gonna like you do a total wipe off, but for most of what we’re talking about here would be in reference to a chapter 7 because that’s predominantly what people file.

So anyway, we go out, you go to a bankruptcy attorney, you pay one usually somewhere 1,500 to 2,000 bucks, and then usually within months, your debts that aren’t government backed are gone, and you no longer owe on them.

The problem is that the creditors that you file the bankruptcy on, they’re not in the huge rush to bump you in anyway. So what will happen is your credit report, in a lot of cases, will be kind of a mess, and there’s a couple of different levels that can happen at it.

Number one, they can be balances on there like BK was never filed. So that’s a pretty obvious inaccuracy where it should be a zero out balance, but a lot of times, it’s gonna say, included in bankruptcy, zero dollar balance, but then there’s this rating system that consumers don’t know about, and honestly not a lot of lenders know about, it’s called the MOP rating system.

And Scott, I know that—because you’re an awesome lender, but there’s a lot of them out there that when I talked about the MOP ratings, they go, I have no idea what you’re talking about, which—that people are settling for home loans on terms that they shouldn’t have to settle for.

So the way it works is that there’s this secret coding system in credit, so 0 through 9—9 is you know, the end goal, be all worse, it’s a charge-up, profit loss, bad debt, it’s you stop making payments on it and it’s on collection status, and what will happen is when you file a bankruptcy.

Everything else to the naked eye and to the eye is gonna look good, it’s gonna say balance included in bankruptcy, and that consumer is gonna say, well that is what is, that’s as good as it’s gonna be, but what you’re not seeing is behind the scenes that MOP rating it’s still a 9, and it should be a 7, and that doesn’t sound like a big difference, but there’s a monster difference between a 9 and a 7, especially when we file a BK, there’s probably 10 items at least on there that were gonna be included in it.

So you got 10 different items that are all coded inaccurately, and basically, even though financially you got relief from that bankruptcy credit-wise, you got next to no relief from it, because everything is still rated as bad as it can be.

So what a client needs to do, is go through their credit report with a professional leader, a mortgage professional or reach out to my cell, we give free reviews all day long.

We’ll go through the credit report and we’ll look at it, find the items that are misquoted, or inaccurate in some way, and either the client can—if the client wants to take on a big old project, they don’t know what they’re doing or they think they do, they can try it on their own.

That’s no problem, I’ll even tell you what’s wrong on there and you can go after that you want, and I’m not trying to plug us in anyway right now.

I’m just saying it’s a lot of work or we can go out to those for you and get them either removed or updated to the proper status, and that’s what needs to happen is that you need to go through on a line by line basis and get things to actually report correctly.

Then you need to look at positive trade lines because you can’t just go through life and not expect to eventually borrow money. Especially you know, you’re over there in California, you want to qualify for a home loan in California, you’re gonna be asking for hundreds of thousands of dollars, for a home loan, a bank is gonna want to see your resume.

They’re gonna want to see, okay, you file a bankruptcy, we can forgive that, but what have you done since then? How have you become credit worthy?

If your answer is, well I called, and I never use my credit ever again, they’re gonna say, oh that’s really not what we’re looking for, we want to see you use your credit wisely.

The way that you do that is that you reestablish a couple of pots to trade lines. Ideally, what I want a client to have after a bankruptcy within the first year, is one installment loan, which is just code for saying, usually an auto loan, that’s gonna be the most common one, and I want you to have at least revolving trade line, which are credit cards, and I know a lot of people after bankruptcy they go, no, no, that’s how I got into this problem, we’re not going back down the credit card route.

And that’s not how you got into this problem. You got into this problem by misusing them or becoming over extended. Again, the good things happen, the bad things happen to good people and good people make that decision, you just need to know what it is.

But again, not using the system or playing by the rules is not the route you want to go, if eventually you want financing. So you need to make sure your credit report is clean, and you need to reestablish credit right away, and then you need to use it correctly by maintaining low balance.

Scott: So let me jump in here really quick, I have a couple questions. The first thing you said that I cannot stress enough. I don’t think they should be called credit scores because it has absolutely nothing to do with how well you manage your financial situation, it should be called a debt score because the score represents how well you go into debt.

And as soon as you know that, you kind of know the game now, and you know that there are rules to the game. Now you mentioned something that I wanted to bring up, you said one installment loan. So what I see is really, really common is most people will retain their vehicle.

That’s the one thing that they usually retain through the bankruptcy. However, because it was included in the bankruptcy, if they didn’t reaffirm it outside of the bankruptcy, they just do a pay to play and they just keep paying on it.

What do you do in a situation like that because that installment loan isn’t going to show up? So if you didn’t reaffirm it in the bankruptcy, can you contact the auto dealer and ask them to start reporting it or what would you do there?

Sam: You could try but – I’ve literally never seen it happen. No, I don’t see debt reaffirm almost ever. Yeah, and especially if it went through, if they didn’t reaffirm and you continue to make the payments on it, and it happens with mortgages too, but, I had never personally seen it, and be careful because there are some rant reporting companies out there that are like, oh if you run on there, unfortunately, rant rarely reports or installment payments—like boy sometimes those companies can also get installment payments to report in this situation, but they only report usually to three ends unit and they’re only back in advantage, or at least in my experience—that’s not the score that the mortgage lender will pull.

If you’re trying to get your scores in order for a mortgage just know that about those rental recording places they have a place, but not usually in the mortgage calculator. So what I would do instead is go to your bank and get like—some of them have like this saving CDs where it’s like a savings account.

You’re paying every month and it is money. But it’s for the purpose of rebuilding credit. So a lot of times what I would is tell people go to your local bank, not your big chain banks, but your local bank that’s regionally owned or operated and they’re usually going to have quite a few options for you in terms of establishing installment credit and that’s what you need to do, is just get something going.

Like it doesn’t need to be the end all, be all of the car loan, of the student loans, of a mortgage loan, it just needs to be something. It’s a piece of the puzzle that needs to be plugged in, otherwise your scores are gonna suck.

Scott: There is so much information and we could literally geek out for an hour on this, but we’re not going to. I’m gonna wrap this up. I want to pull a couple of takeaways out of this thing and talk a little bit about how people can get help.

So the first thing that you had mentioned is go through your credit report, line by line. What’s the timeframe for that? So once my bankruptcy is discharged, you file a bankruptcy.

It takes two or three or four or five months for chapter 7 to go through the process, then you have like a little waiting period and then your bankruptcy is discharged. When should I look at my credit report?

Sam: As soon as it’s discharged. As soon as you get those papers confirming discharged, you should look at it because you need to see how everything is reporting.

How the creditors are—if you want to, just to be safe, you could give it a month after that discharge date to make sure that the creditors have received all of the information that they need, but they were notified months ago that you were filing a bankruptcy.

Scott: Yeah and that’s what I was going to chime in with this. That’s what I notice is normally they stop reporting. If they’re going to report accurately, they will do it as soon as you file the petition because that’s part of the process.

You notify all creditors I’m entering into the bankruptcy process, you can either come after me now or forever hold your peace is essentially what the process is, and they could contact the court, and fight it.

Okay. So, doing that and again, I know you said you weren’t pitching yourself. I’m not worried about that. The reason we do this is because I want people to hear what you sound like because I think if somebody talks to somebody who’s not professional, who’s not experienced, it’s gonna be a totally different experience for them.

It’s gonna be a completely different conversation, and my goal here isn’t to say, hey, work with Sam. My goal is to say, if you can work with a Sam company, you need to, and I think the smart decision is work with Sam, but what it really is I want to expose people to what a professional is, and what an expert is and somebody who actually cares about their clients, and not numbers and sales volume, and things like that that you’ll find with some of these big box, kind of credit repair companies and we’re gonna do a video on that as well.

Last question before we close this out, what’s a good timeframe do you think normally? So what if there was a bunch of stuff that needed to be fixed?

What if the creditors just completely screwed it up, super parks, super high level, how long and how much should that–how much should that cost and how long should it take to get that stuff fixed?

Sam: Yes, so the good thing about it, even though the credit report can kind of be a mess afterwards with numerous items, misreporting or needing attention it’s still fairly easy space because it’s cut and dry, there’s no settlements that needs to happen.

This is very clearly wrong. It needs to be either remove – or 7 at the very worse in terms of MOP, and so usually two rounds of dispute would be the max that we would need for a client in the case situation. So you’re honestly probably only looking at a 3 or 4 month turnaround, and that 2 or 4 months on average.

Our clients that are with us for about 97 days, and that average bill is gonna be $577 for a client. We don’t charge any upfront fees, nothing until the 40th day of service and it’s $399, and then 80 bucks, all we have other bunch of plans available, too, where we can spread that out a little bit more.

Scott: That’s awesome. Okay. Great, well I appreciate this Sam, we talk to a lot of people that are trying to buy a house after bankruptcy, and unfortunately, I’m having this conversation with them when they’re eligible to buy a new home, but their credits are not there.

Hopefully, this is a proactive measure, people can find this, right after they file a bankruptcy, so we’re not trying to do it at the last minute when you have to move or you’re trying to buy a new home. So, I absolutely appreciate you being here.

I’m gonna put all your contact information in the blog post here. And all of the stuff will be on Facebook. It will be on findmywayhome.com, probably be on YouTube as well and I’ll put all your information so if somebody wants to reach out to you directly, they absolutely can, and you said you will review people’s credit at no charge and just let them know what it looks like.

Sam: Yeah, exactly, yeah, absolutely.

Scott: I appreciate you being here, Sam. I look forward to our other credit videos that we’re going to do in the future, and, hey thanks for being who you are, man, I appreciate it.

Sam: Thank you sure brother, I appreciate it.

Scott: Okay, talk to you soon.

Working with a Mortgage Expert

Choosing the best mortgage based on your qualifications requires that you work with a professional loan officer that has experience with all of the options that are available to you.

All mortgage companies are NOT created equal.  Big box lenders that advertise on TV, radio and the internet, often only target a very narrow qualifying criteria.

These popular lenders spend millions of dollars on marketing and advertising, only to dump you into a call center and put you in the hands of an inexperienced customer service telemarketer.

Big box lenders try to convince unsuspecting consumers that it’s the lender that matters, and never mention the fact that your loan officer is the gateway to you getting the best mortgage.

You should avoid these types of lenders at all costs if possible.  They do not offer lower rates or better service, but they do have more money to convince you that they do.

Set Yourself Up for Success





About the Author

Scott Schang


Leave a Question or Comment About this Topic

  • goldie says:

    love to read all your topics. i went bankrupt almost 2 years ago. and am going to try and buy a house. my daugter and i. so i keep up with you we are doing everything you just mentioned.