You made the decision to file bankruptcy and have even started the process. But now you may be wondering what your life will be like after the court gives you your final discharge, with the bankruptcy now over and you not owing most of your debts. This article looks at life after bankruptcy and what you can expect.
Is Your Credit Bad After a Bankruptcy Discharge?
One of the major downfalls of filing a Chapter 7 bankruptcy is the negative impact it will have on your FICO credit score for 10 years. However, when weighed against a financial meltdown and the inability to survive your debt, bad credit for a short period of time may not seem like such a major side effect.
There are many ways you can help repair your credit after bankruptcy discharge. In fact according to the Consumer Financial Protection Bureau, nearly 1 in 4 adults are working to rebuild their low credit score.
5 Ways to Help Rebuild Credit
The good news is that with a little work, planning, and responsible financial behavior, you should be able to improve your credit score. Below are 5 ways to help rebuild your credit:
- Review your credit report. Your credit score is impacted by a number of factors, not just filing bankruptcy. Your credit report can offer you details about what is affecting your low score, in addition to the bankruptcy.
- Pay your bills on time. Paying your bills on time is a main driver of your credit score. Any negative information on payment history, such as a late credit card payment, can seriously impact your score for years.
- Become an authorized user.If you have a loved one or someone you trust with a good credit score, ask them to add you as an authorize user to their account. This allows you to make purchases, with the primary account holder ultimately responsible. But their responsible, on time payments can help build your credit score as well.
- Consider opening a secured credit card. A secured credit card allows you to make purchases like a traditional credit card. But it is considered “secured” because you will have to put money down as a security deposit to open the account.
- Keep some of your credit available. The amount of available credit you use is referred to as credit utilization. This is important because keeping your credit utilization below about 30% can show you are responsibly managing your credit and not overspending.
Rebuilding your credit will take some time. The effects of negative factors, such as bankruptcy, will lessen over time. Remain patient and form good habit, which will eventually pay off in the long run.
Call an Experienced Stockton Bankruptcy Attorney
If you are considering Chapter 7 bankruptcy, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.
For more information or to schedule a complimentary consultation with Central Valley bankruptcy attorney GurjitSrai, please call 209-323-5558, or complete our online form.