There are times when a person has no other choice than to file for bankruptcy. Whether filing for Chapter 7 or Chapter 13, most people wonder if their credit will be ruined after filing. This is understandable, as poor credit can lead to negative outcomes.
If you were eligible to file for bankruptcy, chances are your credit was already in trouble even before the bankruptcy. But that doesn’t mean it will be even worse afterward.
Of course, your credit will take an initial hit right after you file, however it is entirely possible to restore it and even increase it after bankruptcy.
The key is to counteract all of the negative information on your credit report with more positive information. Many people feel that simply leaving it all alone is the best course of action to take. However, the credit score will not increase if there is no activity on your report.
Therefore, you must take action and get started right away.
First, make sure that you have a solid budget that allows you to stay in the positive. Also make sure that the budget allows for you to build an emergency fund. Once you have your budget in place, we will help you assess your situation.
Obtain a detailed copy of your credit report and report any inaccuracies. Dispute them and get them removed or corrected. Then make sure to track your credit score frequently as you begin your rebuilding strategy.
When you have everything straight on your credit report, you can begin to create positive information on your report.
One of the more common ways to initiate new activity is to obtain and begin using a credit card. Since your history may make it difficult to attain an unsecured credit card, it is often advised to get a secured credit card.
This may be one of the fastest ways to begin rebuilding your credit.
A secured credit card is much like a debit card. A deposit is given in advance, and the credit card is good for that amount of money. There are interest rates to contend with and annual fees.
Likewise, make sure the bank does report credit history to the major credit bureaus.
If you do obtain an unsecured credit card, you need to make sure that you make payments regularly, and most importantly, on time.
It is often advised to keep your credit card balance low relative to the card limit. Less than 10% is ideal. Limit your spending and keep your balances low to better manage the amount you’ll have to pay.
This will help prevent you from having to deal with more substantial payments that caused you to file for bankruptcy in the first place.
Over time, you should begin to see your credit score improving.
At Parker & DuFresne, we take a positive approach to rebuilding your credit after a bankruptcy case. We know that a person’s credit is extremely important to maintain.
Not only will we aggressively pursue your bankruptcy case, but we will also help you rebuild your credit when the case is finalized.
We take a holistic approach to our clients’ financial problems. We will be with you every step of the way through your bankruptcy. But you also need good credit to get back on your feet.
So, we will help you with that too with our credit rebuilding program. This program is valued at over $1,000 and has helped our clients restore their credit in just 12-24 months after bankruptcy.
For more information about our bankruptcy attorneys and our credit rebuilding program after a bankruptcy, contact us today.
Parker and DuFresne