Many people believe that it is impossible to rebuild credit after bankruptcy, but this simply isn’t the case. In fact, filing for bankruptcy is likely to improve your credit in the long run. The worst thing for your credit is unpaid debt that continues to increase month after month. Filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy allows you to get a hold of such debts, thereby saving your credit from plunging lower and lower. Of course, the initial effect on your credit score after filing for bankruptcy will be a drop. But with the right financial moves, you can begin to rebuild credit after bankruptcy and create a new outlook for your financial future.
Being Responsible with Your Budget
One of the most important steps to rebuild credit after bankruptcy is to create a budget and stick to it. A responsible budget can help you understand where your money goes and help you identify places that you can reduce spending. A strong budget can also help you have the financial discipline to start saving money. Opening up a savings account is another great way to start rebuilding your credit. Having emergency funds available when your bills are higher than expected or you lose your job is a responsible way to avoid falling back into debt.
Credit Cards after Bankruptcy
Once you feel like you can handle the responsibility, it’s also a good idea to obtain one or more credit cards. A smart way to begin with credit cards after bankruptcy is to get a secured credit line. This is a special type of credit card that works more like a debit card. You deposit funds into an account, and however much you deposit becomes your credit card limit. This way you can only put as much on your credit card as you actually have.
There are a number of other strategies to rebuild credit after bankruptcy such as taking out a small loan and always paying your bills on time. A San Diego bankruptcy attorney, such as Scott Orona, can help you understand what your life will be like after bankruptcy and advise you on how to begin rebuilding your credit.
Call Attorney Scott Orona today at 619-306-7627 to learn more about how bankruptcy works and whether it might be the right choice for you. As a courtesy, you can set up a free one hour consultation with Attorney Orona so you can receive answers to your questions as well as pertinent bankruptcy information.