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Though bankruptcy is dreaded, it might be the best thing to happen to you. Many times, people need a reality check to get hold of their finances. Bankruptcy wakes them up like anything and makes them more responsible financially. Though it affects your credit history and can tank your credit scores, bankruptcy stays on your credit report for a maximum duration of ten years. Credit building efforts can start from the day you get your bankruptcy discharge which is 3-6 months from the filing date in case of Chapter 7 bankruptcy and 3-5 years in case of Chapter 13. Lawyers of Dallas based bankruptcy law firm Recovery Law Group, suggests the following ways to rebuild your credit after bankruptcy:
- Keeping credit report updated. Bankruptcy results in the discharge of your debts. Having the debts discharged is better than having delinquent accounts on your credit report. You should ensure that the information available on your credit report is accurate and regularly updated. This goes a long way in building positive credit.
- Paying debts which weren’t discharged in bankruptcy. Many debts like student loan etc. survive bankruptcy. Making payments against those debts will show that you have reformed.
- Avoid being scammed. Bankruptcy remains on your credit report for 7 years (Chapter 13) or 10 years (Chapter 7). Anyone who says they can get it removed is lying. You should steer clear of such people if you wish to hold on to any money you have.
- Stay within budget. Credit counseling is a mandatory part of your bankruptcy as it teaches you to balance your money. You should avoid getting in debt just after bankruptcy to improve your credit.
- Get a new credit card. Though it may sound oxymoronic, a credit card is the best way to build credit. Establishing that you are a responsible user who can make payments on time will result in building your credit. However, people may find it difficult to get an unsecured credit card, fresh out of bankruptcy. In this case, opt for a secured credit card.
- Take a loan. Once you have made efforts for a couple of years following the above points, you might be able to secure a car loan. Making regular and timely payments on the same can go a long way to prove that you have changed your ways and are reliable to get mortgage loan too.
- Go slow. Doing too much at the same time can not only be overwhelming but might also cause you to make a mistake which might prove costly. Take time and work out slowly to repair your credit.
Despite what you think or feel, bankruptcy is not the end of your life. You can rebuild your life after bankruptcy, all you need is time, patience and continuous effort. In case you are considering bankruptcy to get rid of your debts, you can call experienced bankruptcy lawyers Dallas at 888-297-6023.