Bankruptcy can certainly provide financial relief, as you will no longer live in fear of collection calls, lawsuits, wage garnishment, or even many debt obligations. However, that relief can soon turn into concern about your financial future. Will you ever be able to buy a house or a car again? Will your bankruptcy follow you around and affect your life forever?
While it is true that a Chapter 7 bankruptcy will remain on your credit report for ten years, this does not mean you will be a financial outcast for a decade. Instead, follow these simple tips to rebound and enjoy life after your bankruptcy.
Stop Feeling Guilty
While you may feel bad about having to file for bankruptcy, know that you are not alone in this situation. Many people file bankruptcy for many different reasons that are often beyond their control. Consider the following statistics for 2018 in the U.S. Bankruptcy Court of the Eastern District of Missouri:
- 9,574 bankruptcy cases filed
- 6,145 Chapter 7 cases filed
- 3,415 Chapter 13 cases filed
These statistics only cover one small district, so you can imagine how many parties file bankruptcy statewide or nationwide. Filing bankruptcy is usually a responsible decision, not one to be ashamed of.
Check Your Credit Report
When you receive a discharge, you should see the new zero balances reflected on your credit report. Check to make sure that all of your creditors correctly reported the information to all three credit bureaus.
Stick to a Budget
Now that you do not have many debts, focus on always paying the rest of your bills on time. Create a realistic budget that allows you to pay your auto loan, housing payment, utilities, and other obligations on time, every time without the need for using credit to get by. Not only will this quickly improve your credit score, but it will also hopefully set a standard for financial health for the rest of your life.
Slowly Rebuild Credit
Many people think there is no chance they will get any type of credit for many years after a bankruptcy. This is usually not true. However, you may need to take a different approach then you did in the past. Often, you can get a secured credit card to start. This involves putting $500 into an account and then using that $500 as your credit line. You can charge small amounts and pay them in full each month, increasing your score and building your creditworthiness. After a while, you may be able to obtain a traditional credit card again, though you should be careful to always pay your balance in full to avoid the need for bankruptcy down the road. You will be surprised that you can get certain mortgage and auto loan offers in only a couple of years after bankruptcy.
Discuss Your Situation With a St. Louis Bankruptcy Lawyer
At the Law Office of Kenneth Carp, we know that bankruptcy can have many benefits and should not have the negative stigma many people imagine. If you are facing debt and considering bankruptcy, contact us online or call (636) 947-3600 for a free consultation.