Getting Back on Track After Bankruptcy

When your bankruptcy is completed, and all of your qualifying debt is eliminated, you may start to think of how to obtain good credit again.

While you were going through the bankruptcy process you had to attend credit counseling. The purpose was to teach you how to make and stick to a reasonable budget. Once you’re no longer facing the crisis of bankruptcy, people often eliminate the use of their budget. This is a good time to evaluate and adjust a new budget to keep your finances under control.

Credit Card Choices

You may be surprised to find offers of credit soon after you file bankruptcy. While having some credit may be necessary, you want to be careful not to be overwhelmed in credit card debt again. Some of these new offers of “no credit bad credit, no problem” will have high-interest rates or extended payment terms. You may want to avoid these offers as the payments may be higher than what you can reasonably expect to keep up with. The credit cards that you do have try to pay your balance in full each month to avoid new problems and fees.

Make sure you understand the terms of your credit card, including the late fees, and if your interest rate will go up after a certain introductory period. Another reason you may be offered credit soon after your bankruptcy is the creditors know that you’ll be unable to receive another bankruptcy discharge for eight years.

Follow-up Actions After Bankruptcy

Do you have a copy of your bankruptcy discharge proving that your debt has been eliminated? This document will protect you from creditors attempting to collect after the bankruptcy case is closed. If you still hear from collection agencies after your debt was eliminated, you and your lawyer may be able to sue for damages.

Rebuilding Credit

∙ Checking your credit report for accuracy is easier now than ever with all the free apps that we have available to us. Making sure the information is correct goes a long way to building your credit.
∙ Are you shopping around for credit with reasonable terms? Don’t assume that because you were told you were a poor credit risk that your interest rates will be high.
∙ When you apply for credit for home or car, provide a reasonable explanation for your financial problems by showing any documentation on how you have resolved them.

If you would like more information on eliminating your debt, contact a Sacramento bankruptcy attorney today.