If you have ever encountered financial hardship to a point where you were forced to file bankruptcy this section is dedicated to you. During the 12 month period ending March 2010, 1,057,686 people filed Chapter 7 Bankruptcy. The 1,057,686, does not include all the business bankruptcies or Chapter 13’s monthly pay back plans.
First of all, you made it through one of the most difficult decisions of your life. Now it’s time to move on. Start your recovery and build your life and your credit back within months with these simple steps.
Debt that You Kept (Reaffirmed Debt). Any debt you kept after bankruptcy such as the mortgage on your house or car loan must be paid timely and even early if possible.
Avoid Scams. After your bankruptcy, there are companies that will try to take advantage of you and your situation.
Renting. If you are renting keep careful records of all your payments to your landlord and start rebuilding your credit.
Try a lease with an option to buy or a land contract.
Emergency Fund. Now is your chance to save.
No More Credit Cards? There are two schools of thought on this. One is do not use them. Another school of thought is you need to build your credit again to purchase again. Sure, but be careful you do not get caught in a financial trap again.
Small Chances Small Amounts of Debt. After your bankruptcy you will receive credit card applications. To build your credit back it may be a good idea to have a small one like an appliance or furniture credit card where you pay it all back on a monthly basis. Again, we stress be careful of the interest rate and you must pay it more than the minimum or all of it back to build your credit score.
Credit Unions and Banks. Set up a Saving-Secured loan or Secured Credit Card to help rebuild your credit.
The Proof is in the Paper. Write down all your spending; especially keeping track of your cash spending.
Eyes on Your Report. After your bankruptcy make sure that all debts have been taken off!
We have yet to encounter a client who has come back to us saying I wish I had never filed bankruptcy. We have been told they only wished they had filed sooner. Our clients have been able to rebuild their credit within two years of filing bankruptcy. You can get your buying power back and have a better credit score than before.
Don’t forget your credit score was bad with those judgments, garnishments, and high debt to income ratio. Your bankruptcy summed that all up and wiped it all away giving you the outstanding opportunity to start over.
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