Congratulations on your fresh start! You are probably thinking about how to move forward and how to rebuild your credit. Contrary to popular belief (or from what anyone told you) your credit score will heal faster than you think. Now you have no debt. You are essentially debt free!
There are several ways you can rebuild your credit after the bankruptcy. Before your bankruptcy you were paying numerous creditors minimum payments or possibly your wages were garnished. After your bankruptcy your paycheck is back in your wallet. You have the ability to save your money. With these funds you can stay current on your bills. If you did have any non-dischargeable debts (taxes or student loans) contact the creditor to set up an affordable payment plan.
This is a perfect time to start saving! Open a savings account and start saving. Even a little each month will begin to grow into a nice nest egg for you and your family.
It is encouraged to obtain a secured credit card. With this card put a small amount on it such as a trip to CVS or gas. Pay the amount due each month. Doing this monthly will show up on your credit report as paid in full with a $0 balance. By doing this you are establishing the ability to pay your debts and responsibility financially. It is impossible to go through life without debt but doing it this way is improving your credit score. Do not open too many credit accounts. Make sure this account is in your budget. Too many accounts can be a recipe for disaster.
It is the perfect time to create a budget with your income. The bills you are paying are your regular monthly expenses rather than pay day loans and high interest credit cards. With this budget you will know what bills to pay and when to pay them. Repeating this behavior will soon become habitual.
If you need to get a new vehicle stay away from predatory lenders. Try to do research on car lenders in the area. Try to avoid lender that promise to work with those that have filed bankruptcy. Usually these lenders are the ones that will take advantage of your situation.
Make sure to check your credit report in the years following the bankruptcy. If there are errors you can file disputes with all three major credit bureaus. You will want to make sure the debts that were in the bankruptcy are being reported as such instead of late, charged off or delinquent. The Chapter 13 Bankruptcy will report on your credit report for 7 years and the Chapter 7 will report on the credit report for 10 years. The bankruptcies should not linger on your report for longer than 7 or 10 years. Just remember if you take the steps above the fact it will be on your credit report does not mean it will have an impact that long.
Attorney Shari Lynn Stevens has worked extensively with residents of Northeastern Wisconsin to secure their financial freedom through filing Chapter 7 and Chapter 13 bankruptcies. She also advocates and represents disabled clients in their Social Security disability claims.
