Once your last penny has been discharged or you’ve paid off your last debt under your repayment plan, you can finally enjoy a fresh financial start. You may be thinking what’s next – how to rebuild your credit and how to avoid falling into this scenario again? Contrary to popular belief, there is life after bankruptcy and many have been able to move forward with financial stability.
Here are 5 tips to help debtors once their debt is discharged:
1. Bankruptcy can stay on your credit report for up to 10 years. But this doesn’t mean that you won’t qualify for loans or credit cards down the line, or that your credit score won’t bounce back. While it takes time, it is not impossible. We often counsel clients on how to manage their finances and slowly rebuild their credit health.
2. You can steadily rebuild your credit when you obtain a secured card and pay it off on time to show you are responsible with credit. Within 2 to 3 years, you may be able to qualify for mortgages and car loans. Most filers will receive a barrage of credit card offers, many of which will contain high interest rates, so be cautious of these offers.
3. It is always a good idea to maintain a budget and stick to it. Understand realistically what you can save, what you can spend, and exercise discipline when it comes to spending. Doing so can put you in firm financial footing.
4. Pay your bills on time every month. Showing lenders that you are responsible when it comes to paying your bills can benefit your credit and when you are interested in taking out a loan in the future.
5. Maintain a bank balance. Keep a healthy amount of savings for emergencies. Some lenders may want to see whether you can handle money responsibly, and a positive bank balance is an indication.
Bankruptcy works. At Belsky, Weinberg & Horowitz, LLC, our Baltimore bankruptcy attorneys have seen it time and again, and many filers are better off than if they were to suffer with their debt alone. Learn if bankruptcy is the answer for you.
Contact us at (410) 234-0100.