Repairing Your Credit After Bankruptcy

 Posted on December 00,0000 in Bankruptcy

The decision to file for bankruptcy is not an easy one, and it can drudge up fears about what happens once it is all over. Namely, consumers frequently experience concerns over how bankruptcy will affect their credit. Unfortunately, there is no easy way to answer this question since every situation and case is unique. However, there are cases in which the purported damage of bankruptcy may be negligible, or possibly even non-existent.

Putting Things into Perspective

Despite the common misconception that bankruptcy wreaks havoc on everyone’s credit, it is sometimes actually more beneficial than continuing down a path of late payments and unpaid bills. Each hit to your credit – each missed payment, charge-off, and collection – has a negative impact on your credit. If you have enough of these, and they are frequent because you simply cannot keep up with your debts after a job loss, illness, divorce, or other financial issue, then your credit score is constantly being attacked.

By filing for bankruptcy, these old bills are discharged. As long as you do not incur any new debts, the negative action on your credit report will generally stop. Further, as the bankruptcy starts to age, it will start to have less and less of an impact on your credit rating. So, essentially, while you may be starting from a low score (especially if you have been dealing with debt problems for a while), bankruptcy can give you the chance to start turning things around.

Ways to Rebuild Your Credit After Bankruptcy

There is no one “right” way to rebuild credit after bankruptcy. In fact, there are many avenues you can pursue. You can apply for a credit-builder loan with your bank or credit union, take out a secured credit card, or simply wait until some time has passed before applying for a regular credit card. Keep in mind, though, that you must also be careful. There are scams out there that will attempt to take advantage of you after you file. Opt instead for reliable institutions, such as your bank or credit union, or well-known companies.

Being Responsible with Your Debt

A large percentage of people who file for bankruptcy never intended to default on their debts. In fact, many could afford the credit at the time they secured it. Then they became ill, suffered an injury, or went through a divorce - life happened. No one can really blame you for that, and filing for bankruptcy does not make you irresponsible. However, it is still important to suggest that you take things slow as you rebuild your credit. Add things in only as you can handle them, and try to avoid getting in over your head. Create and stick to a budget, manage your debt responsibly, focus on the future, but learn from your past.

Legal Assistance for Bankruptcy and Beyond

At the Thomas Law Office, we do more than just assist you through the bankruptcy itself. Committed to helping you get back on a healthy financial track, we take a personalized approach to every situation. In fact, we often combine divorce and bankruptcy services to assist those that are trying to forge a completely new path in life. For bankruptcy and beyond, contact our McHenry County bankruptcy lawyers for a consultation. Call 847-426-7990 today.

Source:

http://www.latimes.com/business/la-fi-montalk-20161030-snap-htmlstory.html