Filing for bankruptcy may not be an easy decision, but it can give you a chance to start over – a clean slate if you will. What you do with that second chance is, of course, up to you. Make the most of it by learning how to repair your credit after bankruptcy, and learn how an experienced bankruptcy attorney can assist with the process.
Dispelling the Bankruptcy-Credit Myth
The first thing to understand about bankruptcy and your credit is that the impact may not be as drastic as you fear. In fact, a study from the Federal Reserve Bank of Philadelphia found that people's credit scores typically plunged in the 18 months before bankruptcy but rose quickly once the process was complete. The reason for this is simple: while filing for bankruptcy does hit your credit, the repeated hits caused by late payments and new collection accounts can do more damage over time. Bankruptcy stops the collection process and gives you a new start.
Protecting Your Post-Bankruptcy Credit Score
Although there are many different strategies for improving your credit after bankruptcy (and maintaining it long-term) most include a few key elements:
- Adherence to a monthly budget;
- Use of secured credit;
- Addition of revolving and unsecured credit (when ready);
- Paying off all balances on credit card accounts each month;
- Having a savings account for emergencies; and
- Never take out more credit than you can afford.
Keep in mind that the process does take time, but by taking small steps toward better credit, you can reduce the overall long-term impact of filing for bankruptcy. At the very least, you may mitigate against the damage it can do to your credit, and you can begin to prove your creditworthiness to new possible lenders.
Plan for a Better Future Today
While you could wait to plan for your future until after the bankruptcy process is complete, debtors often experience better outcomes if they start planning before they file. Have a strategy in place, and start working on your budget before you file. As you work through the legal process, start looking at expenses that can be cut out of your life. Then determine what sort of credit you want in the future, determine how you will obtain it, and start working toward your goals. Most of all, discuss your plans with an experienced bankruptcy lawyer.
Contact Our Collin County Bankruptcy Attorney
At the Page Law Firm, we believe in making the most of your new start. That is why we provide such personalized and attentive services. Find out if you are eligible for bankruptcy and get started with on future by contacting our Collin County bankruptcy attorney for a consultation. Call 214-618-2101 today.