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Your Financial Life after Bankruptcy

bankruptcy and divorce

Perhaps you are considering filing bankruptcy but are concerned that you won’t be able to repair your credit afterward. Maybe you have recently completed the bankruptcy process and are wondering what steps to take next. Here are some thoughts on what to expect and how to rebuild after a discharge in bankruptcy. You may be surprised at how quickly your credit score will improve after filing bankruptcy. We have software to estimate the repair time for your credit score. You will need to take certain steps to improve your credit score.

Despite the fact that your debts may have been eliminated or substantially reduced in bankruptcy, your three-digit credit score will likely remain the same as before the bankruptcy. Over time, as you rebuild your credit by continuing to pay your debts in a timely manner, your score will improve. Depending upon the type of bankruptcy you filed, the bankruptcy will remain on your credit report for seven or ten years. You should keep a close eye on your credit score and consider enrolling in a credit monitoring service. It is important that you ensure that erroneous charges do not appear on your report and that discharged or satisfied debts no longer appear as black marks on your report. If a debt that you know has been eliminated continues to appear on your credit report, contact either the creditor or the credit reporting agency to correct the error.

While it may seem strange, an important way to rebuild your credit after bankruptcy is to obtain a new credit card and use it but pay it faithfully and regularly. There are credit cards designed specifically for individuals with bad credit, and most will require that you pay an annual fee. It is important that you see this credit card not as a way to spend money you don’t have, but as a means to prove to creditors that you are capable of repaying your debts. Use the card only for day-to-day expenses, never spending up to the credit limit, and pay the entire balance each month. When you are able, request an increase in your limit, even if you have no intention of spending more than you already are. You want to have a high amount of available credit, as compared to the amount of debt you carry. If you have questions about whether filing for bankruptcy relief might be a good idea for you, contact the Bowling Green office of bankruptcy attorney Lanna Kilgore at (270) 846-3700.

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