typewriter

How Fast Is It Possible To Recover After Bankruptcy?

We all hope that we will never fall into the trap of bankruptcy. When it happens, bankruptcy has a far-reaching effect on our lives because it alters our lifestyle and the way society perceives us. Bankruptcy is embarrassing and uncomfortable to most people. Not only does your credit standing take a beating, but your life is also transformed into a new, uncomfortable normal.

Filing for bankruptcy is usually a measure of last resort. Sometimes, if you are overwhelmed by a growing mountain of debt, bankruptcy becomes the only solution. It is possible to bounce back after a bankruptcy, establish your credit score again and go about your business without any worry. Below are tips you can use to recover after bankruptcy fast.

Avoid Credit Repair Scams

After you file for bankruptcy, you will most likely be bombarded with credit repair offers from different companies. Some credit repair companies have professionals who follow industry ethics to guide you through each step and help you with bankruptcy. However, some are just scams that look to capitalize on your vulnerable situation. According to information from https://www.nylegalhelp.com/, it could be a scam if you receive ads or offers from companies that do the following:

  • They don’t inform you about your legal rights
  • They tell you there is no need to contact the credit reporting agencies
  • They pressure you to pay fees up-front
  • They promise to erase any negative information from your report

All these are classical signs of credit repair scams and most of what they offer are illegal. In addition to your bankruptcy, you could be fined or jailed if found culpable of an offense. In case of further clarification, you can ask your personal lawyer or seek information from the Office of the Attorney General.

LEARN MORE  Keep Your Finances In Line With These Useful Apps

Draw a Personal Budget

Bankruptcy may leave you in a deplorable financial position, but it can be an opportunity to start afresh. The first step towards this goal is to set up a budget and do it ASAP! A personal budget is a financial planning tool that guides how you spend, save, and basically where your money goes. We understand that your budget might have limitations, but let that not deter you from setting short, medium, and long-term financial goals.

Financial recovery and saving more should be the overall goal. Ensure that your spending is not more than half your income and be free to adjust your budget as circumstances change.

online payments credit card

Check Your Credit Reports Regularly

The moment you file for bankruptcy unless the documents in the filing of the case are sealed, the contents become public information. The bureaus dealing with bankruptcy will update the information to conform to Chapter 7 and Chapter 13 requirements for bankruptcies. Regularly check your reports to ensure that it is correctly captured that you are no longer being held liable for any debts wiped off during bankruptcy.

Keep checking your credit reports regularly to track if your credit history is improving. If a debt that was in your bankruptcy has not been included in your credit report, you will need to inform the credit bureaus immediately for your own safety. Also, after a bankruptcy discharge, ensure the debts are updated appropriately.

Rebuild Your Credit

After a bankruptcy, you will need to make deliberate efforts to build up your credit. There are several tactics to do this, but be careful not to fall to credit repair scams. Some of the methods you can use to rebuild your credit include:

LEARN MORE  These 7 Disruptive Technologies Could Be Worth Trillions of Dollars

Establish a New Credit Account

A new credit account will obviously not be the magic bullet that erases all your past negative credit scores. Instead, you can use the account to improve your credit going forward. Have realistic hopes because you may not qualify for some or most credit products, but a new credit account is a right step to rebuilding your credit.

Take Up  a Credit Builder Loan

Credit builder loans from credit unions are designed to rebuild credit. The amount you borrow is inaccessible to you and instead, it is placed in a savings account where it accrues interest. You will be paying a fixed amount plus interest monthly for a set duration after which the funds are availed to you. Timely monthly payments will reflect as positive entries on your credit reports and this will increase your credit score.

Try a Secured Credit Card

If you opt for a secured credit card, you can easily obtain it from banks or credit unions. You will need to make a deposit that works as security for the secured credit card. Using the card monthly, using it prudently, and paying off the balance in time can build a positive credit score.

Bankruptcy does not mean the end of the world. Through discipline, patience, and prudent financial practices, you can bounce back from the deep end and establish a positive credit score.

Total
0
Shares
Previous Article
driving

Reasons Why Defensive Driving Is A Must

Next Article
laptop coding typing

Expert Tips For Creating Digital Signage

Related Posts
Total
0
Share