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Will a Declaration of Personal Bankruptcy Ruin My Credit Forever?

Will a Declaration of Personal Bankruptcy Ruin My Credit Forever?

There is life after declaring bankruptcy.  Filing for bankruptcy provides scores of financially challenged consumers with excessive debt a fresh start or second chance. But rebuilding your financial life can seem like an overwhelming task.  You can re-establish positive credit even while waiting for your past debts to be discharged.

Although a Chapter 7 bankruptcy filing remains on your credit report for 10 years and a Chapter 13 bankruptcy remains for seven years, some credit sources may remain available to you.  Here are a few tips for getting back on the road to financial recovery:

  • Follow a budget. Your budget is your spending plan that will help you live within your means preventing you from accumulating unnecessary debt.
  • Save. Financial experts recommend setting aside an emergency fund equivalent to 3-6 months of expenses.  A savings plan will prepare you for unexpected financial crises.
  • Pay all your existing bills on time. Paying your current bills on time will help restore your finances and improve your credit score.
  • Rebuild your credit, but use caution. A secured credit card with a low interest rate and no more than $500 credit limit can boost your credit score. But beware of potential scams claiming to repair your credit for a fee.
  • Monitor your credit. Your whole goal after bankruptcy is to get yourself back into good financial standing. Take an active role by monitoring your credit reports (you are entitled to view your credit report free every six months). If you see anything that seems incorrect, notify creditors and the credit bureau immediately to remedy the situation.
  • Know your obligations. Many people are under the impression that declaring bankruptcy absolves them of their debt. Not true. You may still be responsible for paying off creditors. Factor these payments into your budget.

There can be a lot of baggage, both emotional and financial, with filing bankruptcy. Moving forward with a positive attitude and a thoughtful financial plan can help you rebuild your credit and get your finances back on track.  We understand.  Our attorneys can help guide you through the bankruptcy process and beyond.

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