Personal bankruptcy can be as stressful as divorce or the loss of loved ones. That’s why it’s so important to get yourself back on the road to financial recovery as soon as possible.
It won’t be easy. Your credit score will take a hit with your bankruptcy, and that’s after it has probably already fallen steadily as you struggled with your finances for the months or even years before you filed. As a result, it will be difficult, if not impossible, to buy a home or car or get credit cards.
Your first step back is to start boosting your credit score. Here’s how.
Check your credit reports. The major credit reporting agencies Equifax, Experian and TransUnion must let you see your reports for free once a year. Carefully scrutinize them for errors or fraudulent activity and challenge any mistakes. This will reduce the possibility of your credit score falling even lower and support your efforts to gradually improve the numbers.
Make positive changes. Your bankruptcy might have been caused by debts run up by a former spouse, a medical crisis or other factors out of your control. But there might also be changes you can make to improve your situation going forward. Take an honest look at your past spending habits. Were there too many impulse buying decisions? Overused credit cards? Did you take on risky investments? Acknowledge your mistakes and make positive changes.
Build a rainy-day fund. While you were in the middle of your financial implosion it was all you could do to make minimum monthly payments and keep bill collectors at bay. But now that your bankruptcy has been discharged and many of your debts are behind you, this is the perfect time to start saving on a regular basis. Your goal is to never get in trouble again, and a rainy-day fund can be accessed before you miss a payment deadline or make another misstep that will further hurt your credit score.
Get a secured credit card. You won’t receive many traditional credit card offers right after your bankruptcy, but it can be easier to get a secured card. That’s a credit card arrangement in which the issuer will demand a deposit to cover the credit line. In other words, if the card issuer gives you a $500 line of credit, you’ll first have to deposit that same amount as security. The advantage is that your transactions will still usually be reported to the reporting agencies, so your responsible card usage could result in higher credit scores.
Be patient. If you do the right things, your credit scores will rise. But it takes time, so don’t expect immediate results.
If you’re considering personal bankruptcy, first consult the best real estate attorney Las Vegas and chapter 13 bankruptcy Las Vegas lawyer. Contact Vohwinkel & Associates and I’ll help you through this time of stress and set you on a road to financial recovery.