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How Can I Fix My Credit After Filing for Bankruptcy?

Posted on in Bankruptcy

How Can I Fix My Credit After Filing for Bankruptcy?

When you file for bankruptcy, your credit can be negatively impacted. Do not let this fact alone keep you from filing for bankruptcy if you need it. While going through the bankruptcy process will require you to make sacrifices and change ingrained habits, sometimes bankruptcy is the only way for an individual to take control of his or her finances. When you complete the Chapter 7 bankruptcy process, a record of the bankruptcy stays on your credit report for up to 10 years. Chapter 13 bankruptcies stay on filer's credit reports for up to seven years.

If, after discussing your circumstances with an experienced bankruptcy lawyer, you determine that filing for bankruptcy is the right choice for you, start actively planning for how you will repair your credit while working through bankruptcy and in the years that follow. You can rise beyond this obstacle, but it will require smart planning from you and a willingness to make sacrifices for your future.

Credit is Not Your Enemy

Poor choices or unfortunate circumstances regarding credit is your enemy, not the credit itself. Remember that, and make it a priority to open at least one new line of credit so you can start rebuilding your score. You can do this by opening a secured credit card or by becoming an authorized user on a loved one's card. Pay your balance in full every month. Give yourself a credit card budget. Once you reach your limit, stop using the credit card until it is paid for that billing cycle.

Stay Within Your Limits

This is the key to budgeting. Set a limit on how much you can spend and do not go beyond that limit.

That is Budgeting 101. When you are actively working to rebuild your credit, you need to apply this principle to other areas of your life, as well. One important way to keep building positive credit without overwhelming yourself is to stick to a reasonable number of credit lines. For most people, this is one or two credit cards.

Always Be on Time

Pay your rent when your rent is due. Pay your credit card bills when they are due. Pay your utilities when they are due. See a pattern? Avoid being late with your payments at all costs. It is not uncommon for late payments to be penalized with fees. Do what you need to do to make sure you make your payments on time, whether that is setting an alarm in your phone, writing them on your calendar, or making out all your payment checks as soon as you get paid.

Work with an Arlington Heights Bankruptcy Attorney

When you file for bankruptcy, your credit takes a hit. This can be a necessary evil. Talk with an experienced bankruptcy attorney about strategies you can use to rebuild your credit so you are able to make large purchases and take on new lines of credit sooner. To set up your initial consultation with a member of our team of Arlington Heights bankruptcy attorneys, contact Newland & Newland, LLP today. Our office is located in Suite 3700 of the prestigious 180 North LaSalle street building in Chicago.

(photo courtesy of Jane Sawyer)

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