The Bankruptcy process is an unfortunate but necessary undertaking for many people. A common concern and frequently asked question is “what happens to my credit after filing bankruptcy?” The answer is often surprising because it’s not nearly as bad as you might expect. The bad news is that it has an initial negative impact on your credit most of the time. The filing of the bankruptcy will instantly report on your credit profile and will knock your score down.
This initial filing (whether you go through with the bankruptcy to discharge or not) remains as a public record report on your credit profile for up to 10 years. The good news is that you score will begin to bounce back almost immediately thereafter and, as long as you don’t get any post-bankruptcy delinquencies, you should be able to be near or above a 700 credit score within a year after the bankruptcy filing.
As time passes, so do the negative impacts of the bankruptcy. To better your situation, it is good to take proactive steps to improve your credit as soon as possible. I typically recommend my clients open at least one secured credit card. With secured credit cards, you open the account with $200 – $500 of your own money and the balance you accumulate by spending on the card is secured by your initial cash deposit (collateral).
The spending limits are low on these cards so it’s hard to get in to trouble with overspending. These accounts, when paid on time every month, will accumulate good credit history and will help boost your score rapidly. You can always contact our attorneys for specific advice about how you can restore your credit after filing bankruptcy.
Bankruptcy law firms such as The Law Offices of Emil Fleysher, P.A., will help you rebuild your credit after bankruptcy. We will provide you with tips from the most experienced attorneys who handle and understand the legal and practical aspects of debt and law.
How Do You Restore Credit?
You are probably familiar with the phrase; actions speak louder than words. The same holds for when you want to achieve a good credit score. You need to show that you are capable of timely payments and handling small loans to start. When you want to attain an even higher credit score in the shortest amount of time, you need to consider the following advice from our experienced bankruptcy lawyers.
Check Your Credit Score
After filing for bankruptcy, you want to note your credit since that number will serve as your baseline when checking progress. Once a month, you want to monitor your credit.
Get a Secure Credit Card
The process of obtaining a secure credit card is very similar to applying for a regular credit card. The only difference is that you place a deposit so you can charge any future purchases. Your credit limit depends on the amount you deposited into the account.
Live Within Your Means
Create a budget for all expenses and pay bills on time. Make it a priority not to have any balances but rather a portion of your income allotted for emergency funds.
Consider Applying for Co-Signed Loans
Getting a loan with a co-signer means that you have a relative willing to pay for you if you miss any future payments. Exercise caution when applying for a loan because you might be subjected to a high-interest rate.
Open a Checking Account
An option for rejected borrowers is to open a checking account and request the bank for a secured line of credit.
Look for Credit Unions
Nonprofit groups that can give you new credit lines are beneficial because it proves to lenders you can repay what you borrowed. Credit unions are excellent for rebuilding credit after filing for bankruptcy.
Call the Law Offices of Emil Fleysher, P.A., Today
If you are interested in learning more about building better credit after filing for bankruptcy, contact an experienced bankruptcy attorney at your convenience. The Law Offices of Emil Fleysher, P.A., serves clients throughout South Florida when they are ready to file for bankruptcy. Call our office at 888-886-0020 to schedule a consultation today.