Life After Bankruptcy

Regaining control

There are a few things to keep in mind in getting back your life after filing for bankruptcy.

Maintain a Job:

It is vitally important that you get – and keep – a job as soon as possible, if you don’t have one already. Employers may request credit scores and histories of their potential applicants as a measure of personal responsibility

Maintain a stable residence:

A stable residential and employment history is necessary because it shows creditors that you are reliable. Unfortunately, a growing number of landlords are starting to check credit references as a means of screening out possible unreliable tenants. If you are not able to rent an apartment or house to your liking, then you may have to room with a friend or relative until your credit improves.

Pay Your Bills on Time:

It is extremely important that you stay current on all of your monthly bills and other payments so that your post-bankruptcy credit record stays clean.  If you managed to hang onto your house, paying your mortgage on time will improve your credit report.

Keep Bank Balance:

Opening and maintaining a checking and saving account are also necessary. But more banks and insurance companies are evaluating their customers’ credit scores. After declaring bankruptcy, insurance companies may feel that you are at risk of being unable to pay your premiums; just like having a history of charged-off bank accounts could hinder your ability to open a new checking account. Fortunately, many banks offer some sort of second-chance program for people in this situation. Keeping a positive balance in all accounts at all times will show employers and creditors that you now have a reliable cash flow.

Start to Rebuild Your Credit:

During bankruptcy, it is important to start to build up what you so quickly tore down. To rebuild your credit you may need to obtain a credit card.  Consider a secured card as a short-term band-aid to repair your credit. If used correctly, a good payment history with the secured card should improve your credit score enough to allow you to qualify for a standard card in 12 months to two years. If you learn how to use your credit cards wisely it will demonstrate to lenders that you can manage your money and that you are determined to slowly rebuild your flawed credit history. This is only a viable option if you can control the credit and not let it control you. If you find yourself racking up debt again, you should cancel your card immediately and start a repayment plan.

Fixing your credit rating is a good thing only when you can handle the credit itself. Keep in mind that the interest rate on any card you are eligible for will likely be higher than the average credit card. When the time comes to buy something larger with debt (such as a car or house), you may need to have another party, such as relatives cosign the loan. However, if credit is not available, then you may simply have to wait until you can pay for a car with cash or consider a personal loan from your relatives and/or friends.

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