Bankruptcy Information
Rapid Credit Score Recovery After Bankruptcy!
Bankruptcy Tip! In working towards fully understanding how to file for
bankruptcy, if you do make the decision to hire a lawyer, you will need to begin an organized search to find the best attorney to
meet your needs. Keep in mind that in this day and age there are lawyers that specialize specifically in the area of consumer
bankruptcies.
Most credit experts agree that the worst possible credit entry on your Credit Report is a Bankruptcy. Whether you have filed a
Chapter 13 (13 is a pay back plan with just some debts eliminated) or Chapter 7 (everything is eliminated except for a few
essentials), it demonstrates a complete failure in managing your credit.
Regardless of why you filed, this entry stays on your credit report for 7-10 years. Everyone has their story, and sometimes
circumstances go beyond anyone's ability to recover from insurmountable debts. A good example is when a family member suffers a
catastrophic illness and the medical bills are way beyond any health insurance benefits.
But there are ways to recover fairly quickly from this type of situation. It takes a little dedication and effort but in as
little as 18 months you can have your credit score back in the high 600 range. Your credit score can range from 300-800+, and if
your score is below 600 for any reason it's time to make some changes.
The reality is that no one is better at improving your credit score than you. It doesn't take any special talent or skills.
You do need to face the reality that you are at a disadvantage and it's time to start taking corrective action. Put the bad
experience behind you and move forward. Easy to say, sometimes hard to do. So if you need some counseling help, a good place to
look is your local community organizations or perhaps even your church. There are people that are willing to help you get over
this problem, and don't have to pay for it.
Bankruptcy Tip! You can also lose valuable assets when filing for bankruptcy,
or you have to pay the equivalent in money.
A low credit score can cost you money, job opportunities, and credit denial. Bad things happen to good people and so many
creditors may consider more than just your credit score. But your credit score still plays a big part in most decisions made on
whether to grant you credit and at what interest rate.
Many high paying jobs ($100,000+) or jobs that you have a key role in handling money will run a credit check on any applicant.
You can understand why, sometimes the temptation is to great and people have misused their positions for financial gain.
Employers have to protect themselves so this policy is very understandable.
Bankruptcy Tip! As we said before, your financial and social status will be
deeply affected. People tend to loose faith upon someone who has filed for bankruptcy.
The lower your credit score, the higher interest rate you will be offered due to the higher risk you represent. Interest rates
can go as high as 28%, that's almost a third of the amount you borrow. But you can still find a relatively good rate, maybe not
the lowest (prime rate +1) but within a few points.
The tough part is finding some creditor to give you a second chance. And you also have to be very careful, as there are many
companies that will take advantage of your situation. The credit industry is a business just like any other. There are lenders
out there that will give you credit, but the catch is finding credit at a reasonable cost.
Start out slow, and make some small purchases at stores who will grant you a small amount of credit at a reasonable rate.
Electronic, appliance, and furniture stores are usually willing to give you a chance to start building good credit. A good
example in Texas is Conns (http://www.conns.com) Appliance Stores. They have a good program and charge very reasonable rates.
Stay within your budget and make a down payment of half. Then try and pay off the note within 6 months or as early as you can.
Do the same thing at a furniture or appliance store. You can have 3-4 good entries in your credit file within 9 months.
Bankruptcy Tip! You won't lose everything that you have. While bankruptcy laws
vary from state to state, every state has exemptions that protect certain kinds of assets, such as your clothes, household goods,
your home and your car (up to a certain value) as well as qualified retirement plans.
Get a small limit (or even a deposit based credit card - most will convert in 6 months or less if you abide by all the
requirements) credit card and only charge very small amounts. Pay off your balance in full each month, and pay it off early if
possible.
Make sure that you pay on time or early on any credit account that you retained after your Bankruptcy filing, such as a house
or car. This will show creditors that you are now managing your credit and will improve your credit score.
In fact if you do all of these things above and follow the basic instructions you will get back up to the 680 score and above.
I have seen it happen time and time again. This is not brain surgery and anyone can recovery from a bankruptcy filing in a
comparatively short time.
Bankruptcy Tip! Get a referral. If you know someone who has filed bankruptcy,
don't be afraid to ask them whether they felt their lawyer handled their case well.
It's also a good idea to monitor your credit reports during your recovery period. Everyone should check his or her credit
report each year. It's now Free and won't take much time as long as you stay on top of it. You can request one credit bureau at a
time every 4 months and have a good idea of what's been entered in the past 12 months.
Bankruptcy Tip! Even if I file for bankruptcy creditors will still harass me
and my family.
Don't pay for something that you can get for FREE. Go to the Federal Trade Commission's site here to get the full details of
getting your free credit reports:
http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm
With a little determination and effort, you can recovery and increase your credit score even after filing a bankruptcy
New Clean Credit is a website that provides free information on Credit Repair. Get their Free Repair Your Credit In 30 Days
Guide. Increase your credit score today. Click here to learn more: http://www.newcleancredit.com
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