Rebuilding Credit After Bankruptcy
Charlotte Bankruptcy Lawyer
If you are considering filing for bankruptcy, one of your biggest concerns may have to do with how bankruptcy will affect your credit. Will your credit be ruined? Will you be able to get credit cards ever again? These are valid concerns that we can help you with!
At Schwilm Law Firm, PLLC we have over 15 years of experience handling bankruptcy cases in the Greater Charlotte Area, over which time we have helped thousands of individuals and couples obtain debt relief under
Chapter 7 and
Chapter 13 bankruptcies. Rebuilding your credit is entirely possible after a bankruptcy discharge, and it is one major benefit that cannot be underestimated.
Credit Rebuilding Tips
Once you file for bankruptcy, you will want to immediately get to work to improve your credit score. By dedicating your efforts to rebuilding your credit, your credit score can reach the 700s long before the bankruptcy falls of your credit.
Tip # 1: Get a Secured Credit Card You can go down to your local bank or credit union and obtain a secured credit card. With a secured credit card, you deposit money; for example, $1,000 and draw from that money as if it were a credit card. By making on-time payments every month, you are re-establishing a good payment history.
Tip # 2: Shop Credit Card Offers Online Did you swear off credit cards forever? Obtaining credit cards is one of the surest ways to start rebuilding your credit and they are a necessary credit rebuilding tool. We recommend shopping credit card offers online. Search for no annual fee or low annual fee cards since many cards are full of unnecessary fees. When you do acquire your first credit cards, you can expect a low credit line and a high interest rate initially, but as you pay your payments on time, you will begin to take advantage of increased credit lines and more competitive offers.
Tip # 3: Don't Charge up All of Your Credit When you do get a credit card, it's important that you do not run up your credit. It's better to charge a small amount, like $30.00 a month or so each month and pay the balance in full. If you wind up getting a bunch of credit cards within a few years of your bankruptcy discharge and nearly max out your cards, it will impact your credit score and your ability to obtain better credit card offers.
Tip # 4: Live Within Your Means Living within your means is one of the best ways to ensure that you do not get into a bad situation again. We suggest sitting down and developing a budget and sticking to it. Do you have more money coming out than what is coming in? If so, you will need to take a look at places where you can cut back. For some people it means eating out less often, clipping coupons, brewing their own coffee, or brown bagging lunch to work every day. Sometimes making a few adjustments can save you hundreds of dollars each month.
Tip # 5: Pay All of Your Bills on Time This one is sort of a no brainer, but it can't be stressed enough. It's essential that you pay all of your bills on time. Nothing looks worse on a credit report after a bankruptcy than late payments and charge offs. By paying your bills on time, credit card companies will see that you are actively working to be a competent and trustworthy debtor.
Tip # 6: Save for a Rainy Day In life, unexpected things happen. Cars breakdown, kids need cavities filled, roofs leak, old rusty plumbing explodes – we get it. This is why it's so important that you do what you can to save for one of these unexpected expenses. If you don't have a cushion set aside, you could be forced to put the charge on credit, or worse, you may receive an emergency service that you can't afford to repay. We recommend starting out with 10% of every pay check, but if that is too much, start with whatever you can afford.
Contact the Schwilm Law Firm, PLLC today!
At Schwilm Law Firm, PLLC, we want to help you and your family rebuild your financial health and look forward to a brighter financial future. For more credit rebuilding tips, contact our Charlotte bankruptcy law firm to schedule your free case evaluation!