A bankruptcy filing may come with great benefits, the most pivotal being getting out of a financially ruinous situation. However, there may be long-term consequences that you must be mindful of, such as the negative effects it may have on your credit. Follow along to find out ways to rebuild your credit and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can offer you some level of credit counseling.
What are the consequences on my credit after bankruptcy?
Your credit journey may be a tumultuous one in the aftermath of your going bankrupt. Specifically, your Chapter 7 bankruptcy proceedings may remain on your credit report for 10 years afterward, while your Chapter 13 bankruptcy may remain for seven years. And with your bankruptcy going on public record, the below consequences may subsequently follow:
- You may find your credit score to plummet (i.e., it may decrease anywhere between 130 to 240 points).
- You may find difficulty in getting approved for unsecured credit cards.
- You may find difficulty in getting credit card offers with favorable terms (i.e., low interest rates, low annual fees, low charges, etc).
- You may find difficulty in getting approved for personal loans.
- You may find difficulty in getting loan offers with favorable terms (i.e., low interest rates).
- You may find difficulty in getting approved for a conventional mortgage loan (i.e., four years after Chapter 7 and two years after Chapter 13).
What are the ways to rebuild my credit after bankruptcy?
Even though it may take a while to have your bankruptcy proceedings removed from your credit report, there are ways in which you may start rebuilding your credit straight away. More specific examples are as follows:
- You must frequently check your credit reports and dispute any errors (i.e., the appearance of debts you have since discharged in your bankruptcy).
- You must apply for a secured credit card or a store or gas credit card that is easier to be approved for.
- You must apply for a secured loan or a credit-builder loan that is easier to be approved for.
- You must ask a trusted individual to co-sign your credit card or personal loan application.
- You must ask a trusted individual to be an authorized user of their credit card.
What’s more, one of our consumer bankruptcy lawyers may be able to offer some level of advice on how to rebuild your credit. Namely, from our years of experience handling cases like yours, we may have useful tips for creating a budget, building an emergency fund, and adopting healthy credit habits. Ultimately, we may be able to recommend a credit counselor for further guidance.
One of the most important actions you must remember to take is hiring a talented Louisville, Kentucky consumer bankruptcy lawyer. Our team at Schwartz Bankruptcy Law Center looks forward to working with you.