How To Repair Your Credit History From Joseph I Wittman, Attorney At Law

Deciding to file for bankruptcy is a hard decision, but can be necessary. A Chapter 7 bankruptcy will be discharged in a few months, while it will take three to five years to discharge a Chapter 13 bankruptcy. When the bankruptcy process is complete, the individual is in a much improved financial situation. Most or all of their debts are gone. At this time, many people want to know how to repair their credit history.

Generally, by the time someone chooses to declare bankruptcy, their credit report was already damaged. There were probably a number of late payments, possibly one or more foreclosures or even lawsuits. However, this is only the starting point. With time and a little work, your credit score will be much improved. Many people have purchased homes and cars even though they had a bankruptcy on their credit report.

Save a Rainy Day Fund

There should be money in the budget to set some aside every pay period for emergencies. Most financial counselors recommend having enough to cover three months living expenses. If the cash is available to cover an unexpected car repair or other expense, there’s no temptation to borrow the money or, worse, put it on a credit card.

Avoid Traditional Credit Cards

Credit cards are involved in the majority of personal bankruptcies. After a bankruptcy has been discharged, it’s not uncommon to start receiving offers of new credit cards in the mail. Typically, these cards have high-interest rates and fees and should be avoided like the plague.

Get a Secured Credit Card

A secured credit card is like a gift card. It is prepaid and can only be used for the balance remaining on the card. Deposit $500, for example, in a bank and then arrange to have a secured credit card from the bank using that bank account as collateral. Use the card and make payments on time to start rebuilding a credit history without incurring new debt.

To get the best possible benefit, never use more than 30% of the available balance. On a $500 card, limit monthly charges to $150. Pay the balance on time and in full each month.

Joseph I Wittman Attorney at Law is focused on helping people in the Topeka, KS area to make it through tough times. Visit the website to schedule a free initial consultation with Joseph I Wittman Attorney at Law. You deserve a second chance.

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