Bankruptcy Help - 5 Things You Can Do After Bankrupcy
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Bankruptcy Guidance: 5 Steps to Take After Filing
Summary:
Many people worry about their credit after filing for Chapter 7 or Chapter 13 bankruptcy, particularly since it remains on their credit report for up to ten years. However, this doesn’t mean you’re doomed financially. It’s important to focus on rebuilding your credit and taking proactive steps toward financial recovery.
1. Keep a Credit Card Out of Bankruptcy
When you file for bankruptcy, you must disclose all assets and liabilities. If you have a credit card with no outstanding balance, you can potentially keep it out of the proceedings. However, the credit card company may still discover your bankruptcy and cancel the card. Try renegotiating with the company for a new agreement, emphasizing your commitment to future business.
2. Rebuild Credit Post-Bankruptcy
While obtaining new credit after bankruptcy may be more expensive, it is certainly possible. Secured credit cards, which require a cash deposit equivalent to your credit limit, are a good option. These credit cards generally don’t indicate their secured status on your credit report, making it easier to rebuild your credit score. Use credit cautiously and always pay on time.
3. Consider Home Ownership
Believe it or not, you can buy a home post-bankruptcy. Many lenders offer favorable terms 18-24 months after a discharge, depending on your current financial health. Focus on re-establishing lines of credit and maintaining a strong payment history. During the waiting period for conventional or FHA loans, keep your accounts solid and save for a down payment.
4. Purchasing a Car
Getting a car loan after bankruptcy is possible, though you might face higher interest rates. Explore options through dealerships’ special financing departments or credit unions, which often offer lower rates. You can also consider purchasing affordable vehicles from charities that sell repaired donated cars.
5. Achieve a 700+ Credit Score
Although bankruptcy initially impacts your credit score, it’s possible to rebuild it. Ensure your credit report is accurate by removing fraudulent lines or debts discharged during bankruptcy. Stop excessive inquiries into your credit report, and notify creditors if they persist. With diligence, you can improve your score significantly within two years.
Following these steps can guide you back to financial stability. Rebuilding credit is challenging but entirely achievable with patience and commitment.
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