Tips for reestablishing credit after a bankruptcy

On Behalf of | Apr 17, 2020 | Bankruptcy

Indiana residents who don’t think that they can repay their debts in a timely manner may want to consider filing for Chapter 7 bankruptcy. Filing for bankruptcy may be helpful if you are receiving calls or letters from creditors on a daily or otherwise regular basis. While a Chapter 7 bankruptcy will remain on a credit report for 10 years, it can be relatively easy to start rebuilding your credit right away.

Make sure your credit report is free of errors

After your case has been discharged, it is important to check your credit report to ensure that information has been reported accurately. Ideally, you’ll want to make sure that the bankruptcy discharge date is correct and that all debt balances that were discharged are reported as such.

There are many ways to rebuild your credit

It is unlikely that you will be able to get an unsecured loan for at least a year or two after your case has been discharged. However, you can improve your odds by asking a friend or family member who has good credit to cosign with you. This person is telling a lender that he or she will make payments on your behalf if you default on the loan. You can also start to rebuild your credit by getting a secured credit card or by making timely payments on student loan or other debt balances that weren’t discharged.

Don’t revert back to bad habits

It is important that you make an effort to pay your bills on time and to refrain from relying too heavily on credit cards. Financial advisers encourage those who have just come out of bankruptcy to make more than the minimum payment on their credit cards each month.

Filing for Chapter 7 bankruptcy may be one of the most consequential financial decisions that you will make in your life. Therefore, it may be a good idea to learn more about the pros and cons of doing so from an attorney.

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