It’s true that your life after bankruptcy may be different than it was beforehand. Bankruptcy generally reduces your credit score and can make it harder to get credit in the future, at least for a short time.
The fear of what might happen after bankruptcy isn’t a good reason to avoid using it when you need it, though. Bankruptcy can free up your finances and make it easier for you to go without the need for credit cards. With better stability, you may not even miss the credit lines you once had.
Recovery after bankruptcy: What should you expect?
After a bankruptcy, you will likely be considered to be a high-risk borrower. You will need to focus on improving your credit score through regular utility payments, cellphone bill payments and other regular payments that report to credit agencies. With a Chapter 7 bankruptcy, your bankruptcy will stay on your record for the next 10 years. If you choose Chapter 13 bankruptcy, it will remain on your record for seven years.
Despite the fact that you may have some trouble getting loans or credit, most people find that they can begin to get credit for some kinds of purchases after only a year or two.
Since you’re going through bankruptcy, you may find it harder to rent an apartment, buy a car or get a job if you don’t already have one. If you have all of these things presently, do your best to maintain the status quo. It could be difficult to get a car loan after bankruptcy, for example, or you may have trouble finding a landlord who will allow you to move in with poor credit.
After bankruptcy, remember to pay all of your bills on time. Stay current, so that your new post-bankruptcy record stays clean and helps you build a positive credit score for the future. You may want to take out a credit card that requires a full deposit, which is one kind that is available to most people regardless of their credit history. This kind of card is designed to help you build your credit, and it also keeps you protected by not allowing you to borrow more than you invested into the card.
These are some things to think about with bankruptcy. Your life may change after one, but you will be able to move on and have a life without debt that overwhelms you.