The Cassidy Law Firm Blog

Friday, October 22, 2021

How to Rebuild Your Credit After Bankruptcy

Have you hesitated to file bankruptcy because you have heard dire rumors that your credit will be irreparably destroyed? Bankruptcy can provide a much needed lifeline when confronted with seemingly insurmountable financial trouble. It can provide a fresh start and before you dispel bankruptcy as a possibility based on things you have heard; you should get the facts. For starters, bankruptcy may have an impact on your credit, but it is by no means irreparable. There are steps you can take after bankruptcy to rebuild your credit.

How to Rebuild Your Credit After Bankruptcy

After bankruptcy, take a moment to pause, take a deep breath, and enjoy the start on your journey to a new, and hopefully brighter, financial future. Next, come up with a plan to rebuild your credit. Bankruptcy will cause your credit to take a hit, but it can be rebuilt by making a concerted effort to do so.

First, check your credit report. Make sure everything on there is accurate and true. Double check to see that the bankruptcy was properly reported and discharged debts have been accurately accounted for. You can report any discrepancies you may find and have them corrected accordingly.

Next, try to get approved for credit. Getting a credit card after bankruptcy can be challenging. Be persistent and be prepared to accept a credit card offer that has less than desirable conditions. You may be subject to low limits and high APRs, but it is still a good and valuable starting point to rebuilding your credit. Getting access to new credit limits and demonstrating that you can continually pay balances on time will be almost necessary to rebuild your credit.

Budget to make sure you can always make the necessary payments on your credit cards and other outstanding debt obligations. Account for your mortgage or rent payment as well as credit card balances in your budget. The consistent and timely payment on your debts will be a great help in rebuilding your credit.

While it may be easier said than done, try and build up an emergency fund. In fact, you may want to consider contributing to your emergency fund as a standard item to account for in your budget. Building up your emergency reserves can help guard against falling into other financial holes on your way to rebuilding your credit. Your emergency fund can help prevent setbacks as you take steps to strengthen your credit and avoid the need for filing bankruptcy again in the future.

New Jersey Bankruptcy Attorneys

Bankruptcy can mark the start of a new, brighter financial future. It may be the second chance you have been looking for as it has become progressively more and more difficult to pay the minimum balances on your outstanding debt obligations. For more information on your bankruptcy options, Cassidy Law Firm is here for you. Contact us today.

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