Fixing Bankruptcy

Mark Deaton

Credit Repair And Bankruptcy

One of the worst things that can happen to a person is bankruptcy. While many people see it as a credit do-over, or mulligan, it is far more serious than that. For many, it can completely alter their lives and leave them struggling to find a new way to deal with money for the next seven to ten years.   

Many feel that only those who mismanage their money are subject to bankruptcy, but something as simple as a medical expense or a lost job can start a person on the road to bankruptcy. If the year 2008 has taught us anything, it is that bankruptcy can happen to anyone, anytime. 

When you declare bankruptcy, the first thing you need to do is relax. Your debts are wiped clean, you are free again and you can now begin to work back to creating a good credit rating.

While your credit rating may have fallen by as much as 200 points with bankruptcy, it is not the end of the world. 

Second, you should now start thinking about how you are going to rebuild your credit following the bankruptcy. This is where credit repair comes in.

To do this, you should start making sure you pay all your bills on time. This is a small step that can help you slowly get your credit rating climbing back up to respectability.

It will also show creditors that you can make payments on your bills, without being late, which means you can make payments on their loans on time, without being late. 

Third, get a secured credit card. This type of credit card is easy to get and all it involves is putting a cash deposit down on a credit card. The size of the deposit will dictate just how much of a credit limit you have.

If you put down $1,000, then you have a $1,000 credit limit. This is a useful item to have because it will still allow you to have a credit card for today’s credit society, while also helping you to rebuild your credit. 

Lastly, begin planning for life after the bankruptcy by not applying for any credit until it is off your credit report. Each time you apply for credit, your credit rating goes down.

If you have a bankruptcy, then you won’t be approved for credit for several years, and applying for it will only hurt your credit. Wait until seven years is over before you apply. 

A bankruptcy is a very difficult thing to have on your credit report, but it is not something that you have to pull your hair out over.

The truth is that if you declare bankruptcy in your mid-twenties, you will be out of bankruptcy by your mid-thirties and still have decades of credit ahead of you.

The bankruptcy will be gone after a maximum of ten years on your credit report, and you will be able to live a life free of debt and much more credit wiser. 

It is not the end of the world with a bankruptcy, it is a new beginning. 

Keep in mind that ther are some very effective credit repair strategies that can minimize and drastically reduce how long a bankruptcy stay on your credit reports.

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