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Starting Fresh: How to Build a New Life after Bankruptcy

Posted on in Bankruptcy

Filing for bankruptcy can be an overwhelming decision. However, according to the Wall Street Journal, it is one more than 1.6 million Americans made in 2010 alone.

It is important to remember — despite popular opinion — that filing for bankruptcy is not innately bad. Also, it does not mean the filer was financially irresponsible. Often, an unexpected event, such as a company shutdown or injury, can leave a person with insurmountable debt.

Whether you file for chapter 7 bankruptcy, which involves the liquidation of assets, or chapter 13 bankruptcy, which involves a payment plan that restructures debt, this decision may be a step toward financial stability. However, you should be ready for the challenges that come with bankruptcy; these may include living without a credit card and following a strict budget.

Rebuilding Your Credit Rating

After filing for bankruptcy, your credit score may take a hit. Potential lenders could see you as a risk because you were unable to pay your past debts, and for a short while, you may not be able to get a credit card or loan.

In Illinois, bankruptcy should not affect your job prospects as potential employers are not legally allowed to discriminate against employees because they have filed for bankruptcy. However, according to Business Insider, this may not prevent companies from looking into your credit and making their decisions based on your financial history.

The secret to rebuilding credit is cutting costs and making payments on time. You may also want to live a more frugal lifestyle. Follow these quick and simple rules, and you may be able to rebuild your credit score:

  • Pay off your balance every month;
  • Pay your bills on time;
  • Dispute false information on your credit reports;
  • Budget for the bare essentials;
  • Build a buffer in savings; and
  • Ask when you can upgrade to an unsecured card.

If you are struggling with debt, it may be time to start considering filing for bankruptcy. Contact an experienced Arlington Heights bankruptcy attorney to find out how a chapter 7 or chapter 13 bankruptcy may be able to help you. Stephen and Gary Newland have 40 years of combined experience practicing law. Call 847-549-0000 to schedule a free phone consultation with one of the lawyers at Newland & Newland, LLP.

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