Establishing Your Credit After Bankruptcy
Excessive credit card balances, unexpected medical bills, loss of employment or a divorce can leave personal bankruptcy as the only option. Once the decision is made to file bankruptcy, the heavy weight of debt is lifted off your back.
For more information about the pros and cons of filing bankruptcy contact the bankruptcy lawyers at LegalHelpers.com. LegalHelpers has helped thousands of people eliminate millions of dollars of debt and they can help you too.
Almost as soon as you have declared bankruptcy your mailbox will begin filling up. Beware the traps of getting mixed up in debt once again.
The first step is to check your credit report to make sure it is clean. Occasionally, some small debts may be overlooked.
Another good idea is to get a secured credit card. A secured credit card is one where you keep a certain amount in the bank and borrow against it. Make sure it has a low interest rate and a low annual fee. Paying the advancement back in two months will reflect positively on your credit report.
If you need to make a major purchase like a house or car, look for “bankruptcy friendly” lenders. Put down as large a down payment as you can afford and finance the rest. A new car will depreciate two years after purchase. Buying used will protect you against this.
Most importantly, however, is continuing to pay all your bills on time. This includes utility bills and rent. Also, avoid payday loans. The high interest rates are a bad credit trap.
Overall, if you stay on the path of financial responsibility, you will emerge from your bankruptcy with a much cleaner credit score than before you filed. You may find a credit counseling or debt education class helpful. Remember, there are resources available to help you to financial freedom.
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