If you declare bankruptcy or default, that significantly harms your credit for greater than the future 9 years. That means you can't get new credit cards.
It's officially either seven (Chapter 13) or ten (Chapter 7) years, but the Internet has a long memory so it depends on who you defaulted on and how egregiously. Chapter 13 is more of a debt consolidation where you have to show sufficient income to fund a repayment plan. Payments are to a U.S. trustee on a court-approved schedule; usually monthly for 3 years but if you can do it quicker that's fine with them. For instance, say you get behind on your house payments and the bank is going to foreclose. Declaring Chapter 13 instantly halts the foreclosure process, and as long as you stay current on the payments to the trustee
and the lender, i.e. the bank, you keep the house. (The bank would much rather have the money than the house, after all.) If your credit cards / car payment / whatever else aren't in trouble, they'll be pretty much unaffected, though I wouldn't put it past some credit card companies to jack up your rate, because they can. The bankruptcy
does show on your credit report for the seven years, but if discharged promptly and in full it's likely no one will care.
A friend of mine started a coffee house in Lowell, MA a few years back. The city was all gung-ho to get more small businesses happening and make downtown a more tourist-friendly and walkable place, and was giving people money left and right. Unfortunately, their clever plan put three coffee houses on the same block, and my friend had to declare Chapter 13. He sold his house to pay the business debt, got what he could out of the business, and the bankruptcy was discharged in two or three months. He didn't lose his cars nor a single credit card. A year later he relocated to Virginia and bought another house, no problem.
Chapter 7 is a liquidation where you pretty much lose everything but all your debt is basically wiped out. Some assets are exempt (you can probably keep your car if it's paid off, and they won't steal your shoes or anything like that) but some debts are also exempt, like student loans, recent unpaid taxes, and child support. You don't make it out with any credit cards or much of anything in the bank. It's common for big corporations (*cough* Trump *cough*) to spin off a smaller corporate entity to handle some high-risk venture; if it flops, the spin-off corp just declares Chapter 7 and evaporates. The parent isn't affected.
ETA: Even after a Chapter 7, you can always get a savings-secured credit card (assuming you have a bank account) - if you keep it for a year and stay up on the payments, the bank will almost always convert it to a regular ol' unsecured card.
for $15 that can also be a plane or a helicopter:
from bankruptcy.
