No one decides when they are little that they want to grow up and file bankruptcy one day. In fact, I think it is safe to say that we would all prefer to have an above average credit score.
The reality of today’s economy is that more and more people are feeling that they have no other option. Even people who were previously high income earners are struggling just to cover their basics.
Making the decision to file bankruptcy isn’t easy and it shouldn’t be taken lightly. The truth is that it will follow you around for the rest of your life and will affect everything from your ability to buy a home to certain employment opportunities.
Because of this, make sure you get the bankruptcy help that you need. You don’t have to hire an attorney, but it is a good idea, especially if you have assets. If you decide not to hire an attorney, there are numerous online resources that can offer bankruptcy help and walk you through the process.
Once you have made the decision, there really isn’t any looking back. A dismissed bankruptcy will actually look worse on your credit than a discharged bankruptcy, so it would not make sense to voluntarily back out once you have filed.
The process will take several months, depending on the complexity of your case and the case load in your county. Once your case is complete, you will get a discharge of your bankruptcy.
Once your bankruptcy is discharged, you will probably have mixed emotions. You may be living without extreme financial pressure for the first time in many years. This will feel great. Yet, it is not uncommon to feel sad and ashamed.
The best thing you can do is focus on the future. It is ok to think about past mistakes, just don’t dwell on them. One thing you should focus on is rebuilding your finances.
Credit repair after bankruptcy isn’t a fast process. It will take some time for lenders to see that you have learned from your mistakes and to trust you again.
Getting an after bankruptcy credit card is one of the best places to start. Check out this post on getting a credit card after bankruptcy.
Another great way to get an after bankruptcy loan is through doing a CD loan with your bank. This can be a great way to reestablish both your credit and a banking relationship.
As far as buying a home, you can expect it to take a minimum of two years for you to qualify for an after bankruptcy mortgage. If you also had a foreclosure, you will need to wait at least three years before you can buy a home.
The best thing you can do while you wait is to focus on strengthening your financial situation and credit repair after bankruptcy. While after bankruptcy credit repair isn’t easy, establishing new credit and managing it properly is certainly worth the effort
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Credit Repair after Bankruptcy
If you are just coming out of a bankruptcy, credit may be the last thing you want to think about. After all, it has just caused you considerable heartache and you may be gun-shy to jump back into the credit game. Let’s face it – current bankruptcy laws mean that if you were eligible to file for Chapter 7, your finances were in pretty bad shape.
The reality is that there is no better time to begin reestablishing your credit than just after your bankruptcy has been discharged. Reestablishing your credit is going to take some time – it will be a couple of years before you can buy a home, and even then, you will be looking at higher rates.
Here are 6 easy things to do for credit repair after bankruptcy:
1. Get a copy of your credit report! Most likely, there will be accounts that were included in your bankruptcy that are still reporting as open and past due. You need to dispute these accounts will all three credit bureaus. Make sure you provide bankruptcy information (case number, date discharged, attorney name if you had one) so that the accounts will be properly updated on the first round of disputes.
2. Reestablish a bank account. Credit Unions and smaller local banks tend to be far more forgiving than large major banks.
3. Get a CD loan with your bank once you have established a relationship and have some cash saved. Yes, you will be paying interest on your own money, but this is far cheaper than living without credit in the long run.
4. Get a secured credit card. Look for one that doesn’t have ridiculous fees. (If you are getting a $300 credit line, but the fees are going to be $250, this isn’t a good deal)
5. Piggyback! If you have a parent or spouse with good credit, get them to add you as an authorized user on their account. They don’t even have to give you a card! Just make sure the account is in good standing and has a low balance. Another important thing to note is that under FICO 08, the new credit scoring model, only a parent or spouse can do this for you!
6. Get an unsecured credit card somewhere that has lower standards than many places – think jewelry stores, department stores or radio shack.
Credit repair after bankruptcy isn’t easy, and it will take time. Poor credit home loans are harder than ever to get, so if owning a home is important to you, you should get started working on credit repair right away. The important thing is to start quickly and be consistent. If getting an after bankruptcy mortgage loan is important to you, you can achieve your goal! If renting doesn’t appeal to you, you may want to consider getting a lease purchase or rent to own home.
Click here for: Rent to own homes listings.
By the way, if you would like to learn more about credit repair after bankruptcy, get my FREE CD 7 Insider Secrets I Used to Take My Score from a 487 to a 787!
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