Tips for Getting through Personal Bankruptcy
Personal Bankruptcy
Bankruptcy is a scary word for many people. In fact, the stigmas that are often associated with bankruptcy often prevent people who need it from filing. Once you are aware of how it works and how you can recover from it when it is over, you will feel more confident in filing so you can get the relief you desire.
Pay Bills on Time
Your credit cards and loan debt will be discharged in bankruptcy, but you will still have to make housing payments, as well as pay utility bills, insurance bills and more. Whether you can discharge your past payments or not, you will still have new payments that can be reported to the credit reporting agencies. During the time after your bankruptcy, it is important to make sure you make all your payments on time to build your credit.
Apply for New Cards and Loans
Credit card and loan credit checks will show up on your credit reports so you should proceed with caution. However, the best way to build your credit is to slowly start obtaining new loans or one credit card to use for emergencies.
Create a Strict Budget
Whether you work with a financial planner or you sit down and do it yourself, look at how much money you make, how much you need for static bills and how much is left. Create a budget you are capable of following and do your best to stick to it. When you aren't able to follow a budget, you are more likely to turn to credit cards for what you need or want.
Keep Accounts Open
As tempting as it may be to close any credit accounts you aren't using, this will actually harm your credit score. This is because part of your credit score relates to the amount of available credit you have versus how much you are using. Closing unused accounts lowers that ratio and thus lowers your score.
Building your credit after personal bankruptcy may seem impossible, but if you know what to do, you can increase your credit score more quickly. Bankruptcy does not have to mean the end of your financial world. With the right steps, you can clean up your credit and get the fresh start you desire.
Have you been thinking of bankruptcy? Contact us to learn how we can help.
