Rebuilding of your Credit Post-Bankruptcy

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The rebuilding of your credit post-bankruptcy

The first step towards rebuilding of an individual’s credit worthiness post his bankruptcy case is to formalize an effective plan and strategy. It is very important to have a working and efficient plan as against the one that caused the downfall and landed you in bankruptcy. Though it is a big relief from all outstanding debts, the report of your bankruptcy filing is going to be impactful on your credit worthiness – at times for 10 years in cases of Chapter 7 filing.

The good news is that as the bankruptcy period ages, the impact of it on credit offers also reduces. Hence, regaining the trust of creditors is generally going to take some initial time. But it isn’t always the case. Let’s see the ways that can help restore the credit worthiness of you –

  • If you have filed for Chapter 7 bankruptcy, it would take another 8 years for you to file another one. Hence it is a good opportunity to lenders to see you as potential customers who will take care of attending to your personal needs, take care of any further debts that you will be incurring and work on a diligent repayment model. As most of your outstanding debts would have been discharged with Chapter 7 filing, the risk associated in a debtor is minimal in an individual who has just completed a filing of Chapter 7 bankruptcy.
  • Rebuild your credit worthiness by checking your credit score and dispute all false claims in it. If that isn’t the case, the Chapter 7 report will have a direct impact on your credit score and hence formalize a strategy to earn the trust of your creditors and work towards effective repayment options
  • An effective way is to procure a secured loan – an example would be to borrow money against money that is already deposited with financial institutions such as banks or credit unions. Remember that this money will be inaccessible till you completely pay off the loan
  • Another way is to borrow money that you already have such as releasing a loan into a savings account and accessing it only after paying out of certain amounts in a repayment model
  • Secured cards also work similar to borrowing money that is already available as a deposit

These repayment schedules and the events are shared by banks/ credit unions to the credit bureaus and they reflect on your credit reports

  • Get a co-signed card or a loan from any other individual who is willing to incur the risk on your behalf. It is one of the huge moves of favor and it will be very important that you stick to your schedules of payment & repayments – else they suffer when you default
  • If an offer of credit, say a credit card of $500 limit is given, make efficient use of it and pay it on a monthly basis. Ensure that you keep the threshold at 30% of the card limit and it sure will help you to rebuild your credit after bankruptcy

Bankruptcy attorneys can be consulted for suggesting best strategies and for devising effective plans for the rebuilding of credit scores. Recovery Law Group houses well-experienced bank attorneys who can come to your rescue when you are looking for the option of rebuilding your financial status after a bankruptcy filing. They serve clients in Los Angeles and Dallas, TX areas.