Rebuilding Credit After Bankruptcy

Bankruptcy Aftermath – The Credit Rebuilding Process

    • Bankruptcy may seem like a hard blow to your credit rating, but in actuality it is the key to begin rebuilding it for most people. If you are unable to pay your bills, then you are receiving negative marks each month on your report. Bankruptcy cleans the slate and allows you to start fresh and receive a second chance.

Bankruptcy remains on your credit for up to 10 years and can have an adverse affect, but the repairing is being done and once the bankruptcy is removed from your report, you are able to start again. If you are trying to avoid bankruptcy, keep in mind that a foreclosure, repossession or a lawsuit will most likely remain on your report for just as long.

Income to Debt Ratio

When you file bankruptcy your debts are discharged and this creates a great reduction in your income to debt ratio instantly, therefore it actually helps your credit score.

Obtaining Credit

You may be over flooded with offers for high interest credit cards with low balances after your debts have been discharged. Take advantage of it. In most cases, you would avoid these
offers, but at this point you need to obtain credit and if you use the card sparingly and ALWAYS pay the payments each month you are able to regain positive entries on your credit
report.

Learn From Your Past Mistakes

You have to stay current on your bills. Never miss a payment or make a payment late. You want to ensure that you are able to afford something before purchasing it, therefore credit should be used very sparingly.

Try to avoid having too many credit cards. One or two should be plenty. Even though your new card may have high interest rates, as you pay it and your credit report reflects good paying history, your credit will improve and you can exchange it for a card with better terms.

Monitor Your Credit Report

Always monitor your report, make sure you check it online for free each year as well as subscribe to a monitoring system. You can dispute anything negative that should not be on your
report easily using online forms and ensure that all discharged items are removed as they were ordered to be.

For information about Illinois bankruptcy laws and regulations or other debt-relief strategies, the Chicago Bankruptcy Attorneys of Zalutsky and Pinski can help. Just call 312-273-1217 from anywhere in the Chicago metro area. The consultation and advice are free, so what do you have to lose?


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By Kerrie Neal

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