What Happens After Bankruptcy?
Once your bankruptcy is over, you will be free from most (if not all) debts, and you will be able to start over with a clean slate. You can say goodbye to threatening phone calls, harassing letters and other collection efforts.
It’s Time to Rebuild Your Credit
Step One: Obtain Your Credit Report and Credit Score.
You should obtain a copy of your credit report from all three agencies (Experian, Equifax and TransUnion). You have the right to get a free credit report from each of these agencies. Review the information, and ensure that all debts are listed as “Discharged in Bankruptcy” on the reports with a zero balance. The three credit agencies are required by law to have accurate information, and ensuring that these debts are listed as discharged can actually help you credit/debt ratio, one of the factors evaluated in a credit score.
Step Two: Prepare a Good Budget.
Now that your debts have been discharged, you need to establish a budget so that current expenses and payments are on time. Carefully manage your finances and make sure you set aside all you can in a savings account in case any emergency arises. Be smart about your purchases. Try to pay in cash and avoid new financing. Most importantly, don’t buy things you can’t afford or don’t really need.
Step Three: Establish a Positive Payment Record.
You will soon be receiving offers for secured credit cards. These are an excellent way to start re-building credit fast. Review these offers, as you will be using your own money, and you want the lowest fees and interest rates you can get. Obtaining this type of credit card will establish a record of timely payments, leading to new positive credit on your reports.
Many people believe their credit will be ruined for years after filing for bankruptcy. While it’s true that bankruptcy can remain on your credit report for up to 10 years after you file, a steady history of current, on-time payments is more important than a prior bankruptcy. Creditors and lenders are more concerned about your current status and current payments than the prior bankruptcy. You can usually re-establish these relationships within 12 to 18 months after the case is concluded.