Rebuilding Your Credit

The main purpose or idea of allowing a person to file for bankruptcy is so that they may have a fresh start in life. This will allow you to put many of your problems behind you and to start enjoying many of the fruits of life again. If you have bad credit, filing bankruptcy may actually improve your credit record. However, the fact that a person has filed for bankruptcy will, of course, have certain consequences, but they often times can be good over the long term.

The most significant consequence is damage to your credit. Credit Bureaus report your bankruptcy for up to 10 years from the date the bankruptcy was filed. Of course, this does not mean that your life is ruined for 10 years and that you cannot get credit during that time period. Probably one of the first things that you will want to do is get a copy of your credit report. You are entitled to a free credit report every 12 months.  There are three main nationwide credit reporting agencies-Equifax, Experin and Transunion.-that you can obtain your rport from. All of your prepetition accounts are now supposed to show a zero balance. However, many credit reports contain errors. If this is your situation, then you might want to look into the credit bureau's instructions for disputing this issue.

Now that you have looked at your credit report regarding your past accounts, you might want to consider trying to reestablish your crredit. I often tell about one of my previous clients. They listed my office address as their mailing address on their petition because they did not want the mail going through the post office. The post office is where they worked. Upon receiving a discharge, my office started receiving about two credit solicitations on their behalf every week for the next year and a half. As you can see, you will not have difficulty getting credit.

Creditors know that you cannot receive another Chapter 7 discharge for the next eight years, so they oftentimes seek out people who just filed bankruptcy. Generally, you will not be able to go to the bank and get loans at the most attractive rates but instead will have to go to a finance company that will charge higher rates and will not have as good of terms. It is important to remember that you are developing a new credit record as soon as you file bankruptcy.  Therefore, you want to determine what particular debts that you have that are nondischrgeable so you can be very propmt and timely on making any required payments from that point forward. If you have establisjed a good credit record then you should be able to get a conventional mortgage at the going rates about two years to fouryr=ears after your discharge. The fact you you filed bankruptcy can be a high point in your life. You should develop a plan on how to move forward and you will then reap many of the banefits of the fresh start that bankruptcy is mean to provide.