There are many benefits of filing for bankruptcy. At the same time, there are just as many reasons why you may not want to consider this unless you have no other choice.
Many people shy away from bankruptcy because they have concerns about the impact on their credit score. While there is no denying the fact that filing for bankruptcy will cause some harm, this isn't reason enough to turn away.
Here are two things to remember:
- A Chapter 7 bankruptcy will remain on your credit report for up to 10 years
- A Chapter 13 bankruptcy will remain on your credit report for up to seven years
With this in mind, you'll want to turn your attention to the steps you can take to improve your credit score after bankruptcy. Here are some of the many things you can do:
- Check your credit score to know exactly what you are up against
- Do whatever it takes to reestablish credit as soon as you can, such as through the use of a secured credit card
- Keep old accounts active, as this will have a positive impact on your credit score
- Don't apply for too many accounts in an attempt to reestablish your credit
These are just a few of the many things you can do to improve your credit score after bankruptcy. It's a slow and steady uphill climb, but you'll find yourself making progress soon enough.
As long as you know your legal rights and what to expect from bankruptcy, you won't be surprised by anything that comes your way.
Source: Money Crashers, "How Does Bankruptcy Affect Your Credit Score?," Kira Botkin, accessed Jan. 03, 2018