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I'm usually pretty good at answering money questions for my friends but this one has me stumped. First, a little background

A few years ago, a friend of mine had great credit (low balances, great payment history etc.). In 2015, he took a commission only job and burned through his savings to the point that he started living on debt. He was told it was normal the first year in the business so he kept going. Finally, in March of this year, he had some fairly significant setbacks and declared Chapter 7 bankruptcy

One of his accounts was in relatively good standing. He made payments to them and enjoyed some of the benefits they offered him. His lawyer advised him to stop paying everything so he did and the account (a credit card) was discharged with the rest of his debt.

His question is: at what point can he establish a new relationship with this creditor?

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    I'm not experienced enough to answer, but my guess would be "as soon as the creditor will accept him"... which may be the entire time that the bankruptcy is on his credit report.
    – Bobson
    Dec 15, 2017 at 4:56
  • This isn't related to your question, but I'd like to highlight: "he took a commission only job and burned through his savings to the point that he started living on debt. He was told it was normal the first year in the business so he kept going." Unfortunately I have heard this story too many times, and I know multiple people that gave up good careers on a "promise" and/or "dream" that didn't pan out. Everyone please beware of "commission only" as your primary source of income.
    – TTT
    Dec 18, 2017 at 16:19

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It's entirely up to the creditor if and when they might want to do business with him again. He can ask them if they'd be open to extending him credit again in the future.

I'd suggest waiting a year or two before having that discussion with a loan officer. It will be helpful to be able to show a few years of responsible credit management before he tries to do business with that creditor again.

He should also consider the circumstances of the bankruptcy. If, for example, he discharged $30,000, I don't imagine that creditor will ever be eager to do business with him.

I'm not an attorney or a financial advisor. This is not legal or financial advice. You should consult a qualified attorney and financial advisor.

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