Filing for bankruptcy offers many benefits to an individual with insurmountable personal debt. Bankruptcy offers a restart on your financial situation and removes the pressure of many debts.
While nobody ever wishes to find themselves in the position of filing for bankruptcy, it is a very beneficial option.
However, there are some downsides to filing for personal bankruptcy. This doesn’t just refer to the complicated legal process.
Rebuilding credit is a common concern among those who are filing for bankruptcy. It is true that bankruptcy does negatively impact your credit score. But there is some good news in that area.
First, this setback is only temporary. A bankruptcy filing stays on your credit report for 10 years when you file for Chapter 7 bankruptcy. Under Chapter 13 bankruptcy, it remains on your credit report for seven years.
These durations may seem like a long time, but the tradeoff is freedom from existing debts. And it is also very important to note that rebuilding credit after bankruptcy is not impossible.
In fact, if you exercise caution and responsibility, you could end up with a better credit score than before bankruptcy.
Filing for bankruptcy is a process that must be taken very seriously. While it relieves the burden of personal debts, bankruptcy does not mean you can behave irresponsibly with your finances.
In fact, the best way to rebuild credit after bankruptcy is to exercise caution and responsibility. Bankruptcy should be treated as a fresh start to work on new financial habits.
With that said, here are a few basic ideas you can stick to to help rebuild your credit after bankruptcy.
Hopping to one job after another can be a bad sign for most credit agencies. This can be an especially bad sign when you are trying to rebuild your credit after bankruptcy.
Agencies could see this and interpret it as you (or at least your employment status) being untrustworthy.
However, if you can hold onto a stable source of income for a while, it will reflect positively on your credit score.
Bankruptcy should clear away many pre-existing debts. However, it does not absolve you of the responsibility of making future payments.
Utilities, child support, and any loans or debts incurred after bankruptcy all still need to be paid. But this can provide you with a great opportunity to rebuild your credit.
Simply making your existing payments on time is one of the easiest ways to improve your credit. You should take the opportunity to develop good financial habits like this after you file for bankruptcy.
Excessive debts are what prompted you to file for bankruptcy in the first place. Borrowing money to open new debts shortly after getting out from under old ones will reflect poorly on your credit.
If you do need to take out a loan for something important, consider using a trusted co-signer.
This will make it easier for you to secure a loan with good terms. If you are able to open an affordable loan, it will give you another opportunity to make on-time payments.
Last but certainly not least, maintaining a budget for everyday living is a great fail-safe for overall financial wellbeing.
This is especially important when recovering from bankruptcy and rebuilding credit.
Making sure not to exceed your budget means you should be aware of exactly how much you owe on every bill. It is harder to be surprised by unexpected payments, and thus fall behind, when you budget responsibly.
The best bankruptcy lawyers do not only help you navigate the legal process of filing for bankruptcy.
When you work with an expert bankruptcy attorney, they will also help you rebuild your credit afterward.
For Utah residents, Blue Bee Bankruptcy offers the most expert, dedicated bankruptcy law services you can find. Contact us today to schedule a free consultation.
If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.
Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!
Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-098.