Reestablishing Credit After Bankruptcy
April 21, 2021
Despite the negative connotations of bankruptcy, it does not mark the end of your financial success. In fact, bankruptcy establishes a fresh start for individuals and families to move forward and make better financial decisions in the future. With the lessons you learn through filing for bankruptcy, you can apply that wisdom to reestablish your credit.
Yes, filing for bankruptcy does create a negative strike on your credit report. Every missed payment, overdraft, and collections account will be documented and reported. When bankruptcy is finalized, many of these documentations can be removed, and some will be listed as “settled.” These will mark the end of your bankruptcy journey and give you a starting off point for your new life.
The credit rebuilding process can begin once your credit correction is all clear. This will take time, and it is essential that you make wise decisions to keep yourself out of the same financial dangers you faced previously. It will be wise to obtain an open credit account. Most likely, you will be required to put a deposit down to open the account. Yet, as you pay off your balance regularly on time, you will slowly establish credit on your behalf.
A credit card should not be your only form of debt. It is ideal that you take out a small loan. This loan could be used for home renovations, purchasing a car, or an investment-type purchase. Not only does a mixture of debt help you build credit, but it will establish a better outlook for the future.
You will want to stay abreast of your changing credit score following bankruptcy. It is a good idea to use a credit monitoring service and ID theft protection. You certainly do not want someone else racking up debt in your name, ruining the credit you are working hard to rebuild. As your credit score rises, you will be able to see when you have recovered a high enough credit score to take on larger loans or expenses.
George R. Belche, Attorney at Law, provides personal care and attention to those seeking bankruptcy as a means to reestablish their financial lives. Contact our practice for a free consultation.
George R. Belche, Attorney at Law
189 W Pike St, #103
Lawrenceville, GA 30046