Almost everyone I talk to, when considering filing for Bankruptcy Protection, asks “How will this affect my Credit?” What they really want to know is, will they be able to get credit in the future? The answer is that Bankruptcy temporarily causes your credit score to go down, but then within a year or two, it actually goes up, so much that most people are able to borrow money again, to buy cars, houses, and get credit cards. Of course, you don’t want to borrow so much that you are back into debt problems! But, you want to have some credit available, to use wisely.
This article in Barrons “How Seniors Can Recover from a Bankruptcy Filing” gives some great ways to recover pretty quickly, and these tips apply to anyone, not just Senior Citizens: Use a Budgeting tool. Now, it’s so easy to get a phone app to take the transactions right from your bank, and it will tell you exactly how much you are spending, and which categories. Also, get a secured credit card. This involves you putting a deposit at the bank, literally to use to make charges against that money. So, you rebuild your credit, and you can’t spend more than you have at the bank! This will help you see exactly how much you can afford. Eventually, you can get the deposit released, but it is a great tool to start you back on a responsible path!
Order your free credit report at Annualcreditreport.com, about 6 months after the Bankruptcy case is over, or Discharged. You can check to be sure that your debts are properly reported as “Discharged in Bankruptcy”. We can help you with that step and review your credit report to see if there are any errors to be corrected. This is part of our BankruptcyLawChicago service. See this Blog post for more information on our Free Credit Review.
Rebuilding your credit is very important, and should be done carefully!
Daniel J. Winter