The best time to start rebuilding your credit is as soon as filing bankruptcy. You might be surprised to find that it’s easier to get credit after you filed bankruptcy than before you did. The reason for this is simple. Credit card companies and automobile finance companies know that you can only file for Chapter 7 bankruptcy every 8 years. They also know you’ll have more disposable cash on hand right after your bankruptcy, so you’ll be in a better position to afford the payments.
Although it is important to start early to rebuild credit after a bankruptcy, it’s also important to take it slowly. Credit offers you’ll get soon after filing for bankruptcy will have very high interest rates. Accepting too much credit at once will not help you increase your credit score and could get your into financial trouble again. However, taking one credit card, even with a high interest rate, and using it responsibly, can result in an improved credit rating over a short amount of time. As your credit score improves, lenders will consider you a lower credit risk and will be willing to loan you money at better rates.
If you file Chapter 13 bankruptcy, you may need to wait a little longer to start rebuilding your credit. You’ll be on a strict budget for the duration of your bankruptcy and won’t have much extra money to pay other bills. After your case is discharged, you should have the discipline to manage one or more credit cards. Lenders understand this as well, and will be more than happy to give you a credit card or a car loan as soon as your Chapter 13 is discharged.
Excessive debt can be very frustrating. If you don’t have enough money to pay all of your bills and you are steadily getting deeper in debt, schedule a consultation today with an experienced bankruptcy lawyer. For more information on how to rebuild credit after a bankruptcy, talk to your lawyer or one of the knowledgeable credit counsellors who will work with you before and after your bankruptcy case is filed.
Visit Stlbankruptcyfirm.com for further details.
