Life after bankruptcy is meant to be a fresh start for those who found themselves in a dire financial situation. It’s important that once the bankruptcy is officially behind you, you take appropriate steps to ensure that you don’t end up in a similar situation again.
Here are a few quick tips that will help you build a strong financial reputation post-bankruptcy.
Improving Your Credit Score
For the seven to ten years following your declaration of bankruptcy, your credit score and reports will reflect this difficult decision. While the bankruptcy will indicate that you were having a difficult time paying debts, your credit report will also no longer contain accounts that had been sent to collection.
If you had student loans, those were likely not able to be discharged with the other debts in your bankruptcy case. The remaining amount on the loans will still show on your credit report, so making those payments regularly and paying any additional monthly interest will do wonders for your credit score.
If you have any other open accounts that weren’t discharged,, such as a car loan or mortgage, be sure to keep up on your payment schedule so that your lenders don’t report your accounts to the credit bureaus as late.
Additionally, if you hope to improve your credit score after bankruptcy, it is crucial to make sure that no new accounts go into collections. Phone and utility bills are some of the more commonly seen expenses that fall to the side during a financial crisis. If you find yourself in a situation where you’re having difficulty meeting these obligations, contact the company to set up a payment arrangement that will work for you.
Another smart way to build yourself up financially while recovering from bankruptcy is to live very simply and within your means. It’s easy when you find yourself with unexpected money to take that cash and spend it on items of extravagance that you might not really need.
If you set that money aside into a savings account or use it to pay ahead on some of your more regular monthly bills, you’ll slowly but surely find yourself facing a bright financial future.
Build Good Credit
Although you might be leery about opening up a new credit card account after the struggles of your bankruptcy claim, having an open line of credit can do wonders for your credit score. You might not be able to find a credit card company willing to work with you right away due to your history of bankruptcy.
It’s important that you not routinely apply for a line of credit, as numerous hard inquiries on your credit report can dramatically lower your score.
Your best option may be to open up a secured line of credit. These credit cards work similarly to a bank account in that you’ll deposit a certain number of dollars into the account and then use it as a credit card and make regular payments. The creditor will then report your on-time payments to the credit bureaus so that you are able to build up a solid foundation for future creditors.
Contact a Terre Haute Bankruptcy Attorney
If you have more questions about how to live your life post-bankruptcy, reach out to an experienced Terre Haute bankruptcy attorney with the Rowdy G. Williams Law Firm. You can schedule a no-obligation consultation today by filling out the contact form below or by giving us a call at 1-812-232-7400.