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Life After Bankruptcy: Managing New Credit / Debt

The Keys To Managing Your New Life

Upon completion of your bankruptcy you will have the “Fresh Start” you deserve.  There will be no more harassing creditor/debt collector calls demanding payment from you. You can start rebuilding your credit and your credit will no longer be adversely impacted by the debt you eliminated through your bankruptcy. After a bankruptcy, your debt is discharged and you have an opportunity to use your past experience and keep out of detrimental financial situations. Whether it was unemployment, credit card debt, auto loan debt, medical debt, or real estate debt that were major sources of financial hardship, you now have an opportunity to manage your future with a new debt-to-income ratio which you would not have had without the bankruptcy.

Can You Get New Credit?

It is not uncommon for to get offers for loans and credit cards soon after your bankruptcy. Although a bankruptcy may appear on your credit report for 10 years, it does not mean that bankruptcy will continue to adversely affect your credit. If you manage your new post-bankruptcy financial situation properly, you may have much MORE opportunity opened to you in forms of credit card offers or other types of bank loan offers than you would have had with looming outstanding debt and rising borrowing rates. Bankruptcy may be the right path to allow you to actually IMPROVE your credit scores if managed properly with proper decisions.

What To Keep In Mind

1. Do not be discouraged by your past bankruptcy filing. As mentioned, a past bankruptcy filing is obviously not something to be proud of, but you are in a better situation after having filed it. So, focus on the future and maintain your financial situation to continue to improve your financial record.

2. It does not take long to recover from bankruptcy. Keep your financial goals in mind and continue towards attaining these goals because your bankruptcy will be a distant problem within a short time period. You can start talking to lenders about what your goals are and how long you need to wait before you can get loans. For example, you can talk to a mortgage broker and ask them what the current wait is to get a home loan after a bankruptcy. Last we checked, it was only 3 years. 3 years should be a good amount of time to save towards a down-payment for a home if this is one of your goals.

3. Learn from your mistakes. Remember what got you into the problematic debt situation in the first place and do not make the same mistakes. If it means living more within your means or paying closer attention to the management of your bills, learn from your past mistakes and use the valuable lessons to pave a bright future.

4. Monitor your progress. There are many ways to monitor your credit progress without using full inquiries on your credit. You can find applications that can use “soft” inquiries to check your credit rating. Hard inquiries can damage your credit score further.

5. Look for credit opportunities to help improve your credit. If your credit only allows you to open pre-paid credit cards, then you can start with that until your credit improves to allow you to open a credit card. When you do get the opportunity to open a credit card, be responsible and manage it closely. Use automatic payments to avoid late payments and fees that could cost you and damage your credit again.

6. Be patient. Take the time it takes to improve your credit to save a financial buffer for yourself so that you can responsibly handle future emergencies. Use the time wisely and don’t rush. Time will fix all the credit issues that are left over. If you are considering a credit repair service, make sure you have done your research. Not all credit repair services work for everyone.

Bankruptcy Law Professionals can help you with your financial problems and get you the “Fresh Start” so you can have your life going in the right direction.


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