The great thing about bankruptcy is that it wipes out most consumer debts and gives individuals and households a fresh start, well sort of. In reality, those who file for Chapter 7 or Chapter 13 bankruptcy protection have to work their way back to a respectable credit profile, as discussed in a Wall Street Journal article.
The WSJ article offers eight credit-repair tips consumers should consider once they walk out of their Atlanta bankruptcy lawyer's office.
Craig Watts, spokesman for FICO credit-score creator Fair Isaac Corp., said it takes time, patience and discipline to bounce back after bankruptcy:
"It's the single worst thing you can do to your credit rating, but the good news is that you can recover from a bankruptcy."
And according to the article, the following eight tips will help you get back on track:
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Examine Your Credit Report: Make sure your bankruptcy is appropriately reflected and that debts which were part of the bankruptcy are duly noted as such.
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(Repeat Step 1)
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Develop a Strict Budget & Stick To It: FindLaw offers some insightful information on how to create a household budget.
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Apply For New Credit: You'll want to prove to lenders that you can handle credit, so start small and develop a positive track record.
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Use Automatic-Payment Plans: This will help ensure that you pay all of your bills on time, which in turn will help your credit score.
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Be Timely with Student Loan Payments: While student loans usually can't be discharged in bankruptcy court, making the monthly payments on time will help your credit score.
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Look For Secured Credit: This is especially important if you're unable to get unsecured credit (like most credit cards). A prepaid credit card or one with a credit limit equal to your bank balance is a good place to start.
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Don't Max Your Cards: Credit scores are partially based on the ratio of your balance to available credit, so a low balance will help your score.
It also would be wise to ask your Atlanta bankruptcy attorney for more advice on what to do after your bankruptcy.
Related Resources:
- Rebuilding Credit FAQ (FindLaw)
- Consult with a Bankruptcy Attorney in Atlanta (FindLaw)
- Late on Loans: Consumer Delinquencies Hit Record High (FindLaw's Common Law Blog)
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