Pulling Yourself Back Up After A Bankruptcy

Filing for bankruptcy can give you the chance to get a fresh start, and can also remove the heavy burden of being over-extended with debt and credit lines. The key is to begin re-building your credit and re-establish favorable ratings on your credit report for your future.

Following your bankruptcy filing is when the real work begins; start pulling yourself back up with these bankruptcy tips:

The sooner, the better. There are distinct advantages to re-building credit as soon as possible. You will be offered the best financing deals and interest rates immediately following your bankruptcy, as many creditors will see you as someone who has recently discharged the majority of their debt. This means that you will likely make your payments if they extend you credit if only to re-establish your credit rating.

The laws are changing. Bankruptcy laws change periodically, particularly after a new presidential administration takes office. These laws impact your credit report when you have filed Chapter 13 or Chapter 7 bankruptcies.

Your credit rating is on hiatus. Know that once you file bankruptcy, creditors stop reporting to the three major credit bureaus. If you try to make your payments on good faith, you will not be building new credit from these loans. The thing to do is to speak with a financial advisor or bankruptcy attorney to inquire about how to refinance these and regain credit reporting, which will help you rebuild your credit faster.

If you must, borrow for a car. You may have to shop around to find an auto lender that will extend credit to you post-bankruptcy, but it is worth it. Paying a new auto loan in a timely fashion can add up to 100 points to your overall credit score, which is based on a scale of one-to-800, which will make a significant difference on your credit report.

Preserved lines of credit don't count. When you filled out the paperwork for your bankruptcy, you were asked about the loans that you did not want to discharge, i.e. your mortgage, your primary vehicle loan, etc. These loans will not count toward re-establishing credit after your debts have been discharged, as you must take out a new line of credit to begin re-building your credit rating, ranking, and score.

Be careful about how and when you rebuild your credit following a bankruptcy; move quickly, but don't take on more than you can comfortably afford to pay.

Contact a lawyer like Stuart J Sinsheimer Attorney at Law for more information and assistance.  


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