After a bankruptcy it is inevitable that your credit will diminish. However, it’s important to know that if you were to let your debts go unpaid, allow your car to be repossessed, or let your home fall to foreclosure your credit will still be damaged severely. Also, your future lenders may look at a bankruptcy as you doing the responsible thing by getting help, but letting your assets be repossessed might look like you just don’t care.
You can turn your credit around after bankruptcy.
It’s just going to take some work and a lot of patients. The debts didn’t accumulate overnight, and rebuilding your credit will take some time.
- Banks and other lenders usually will consider you for secured lines of credit after a bankruptcy. Some examples are secured credit cards backed by a down payment, or a small loan secured by property.
- Ensure that you never spend over 30% of your total secured credit card limit, and that you pay the balance off each month.
- Make sure to budget before you take out a secured loan. Understand your interest rate and monthly payments fully. Don’t head back in the direction that led you to bankruptcy in the first place. If the monthly payment on your new secured loan is $100.00 dollars, make sure you have that AND cushion room within your budget.
- Create a “Cash Safety Net” or “Emergency Fund” make room in your budget to save cash. Things happen unexpectedly. Make sure you’re ready for them. Save a little from each paycheck, the ideal savings account can get you through 6 months if you were to lose your job.
- Make sure you always have a cushion of cash. An example would be keep at least $100.00 in your checking account and about $500.00 or more in your savings.
- When looking for secured loans or cards know that you are probably going to have a higher interest rate, but be wise and shop around for the best one.
C. Golden & Associates can help you with your chapter 7 or chapter 13 bankruptcy filing. Don’t let the fear of bad credit stop you from getting the help that you need. If you have any more questions call our office today to schedule a free consultation with a professional bankruptcy attorney in Fayetteville or Lithonia, GA.