Rebuilding Your Credit After Chapter 7 or Chapter 13 Bankruptcy
If you have filed for bankruptcy, you might wonder how to restore your credit and get back on track financially. Bankruptcy can have a negative impact on your credit score, but it doesn’t have to be permanent. With patience and discipline, you can rebuild your credit after Chapter 7 or 13 bankruptcy and achieve your financial goals.
What is the difference between Chapter 7 and 13 bankruptcy?
Chapter 7 bankruptcy is a liquidation process that wipes out most of your unsecured debts, such as credit cards, medical bills, and personal loans. However, you must also surrender any non-exempt assets, such as equity in your home, car, or jewelry, to pay off your creditors. Chapter 7 bankruptcy stays on your credit report for ten years from the filing date.
Chapter 13 bankruptcy is a reorganization process that allows you to keep your assets and pay back some or all of your debts over three to five years. The amount you pay depends on your income, expenses, and the type of debt. bankruptcy stays on your credit report for seven years from the filing date.
How to rebuild your credit after bankruptcy?
Regardless of which type of bankruptcy you filed, there are some steps you can take to rebuild your credit after bankruptcy:
- Check your credit report. After your bankruptcy is discharged, you should review your credit report and ensure that all the debts included in your bankruptcy are marked as discharged or paid in full. If you find any errors or discrepancies, you should dispute them with the credit bureaus and the creditors.
- Pay your bills on time. One of the most important factors that affect your credit score is your payment history. To show that you are responsible with your finances, you should pay all your bills on time and in full monthly. This includes rent, utilities, phone, insurance, and other obligations. You can set up automatic payments or reminders if you have trouble remembering due dates.
- Establish new credit. Another factor that affects your credit score is your credit mix, which is the diversity of types of credit you have. You should establish new credit accounts after bankruptcy to improve your credit mix. However, it would help if you were careful not to apply for too many accounts at once or take on more debt than you can afford.
Why hire a bankruptcy attorney?
If you are struggling with debt and considering filing for bankruptcy, you might be tempted to do it yourself or use a cheap online service. However, this could cost you more in the long run and jeopardize your chances of getting a fresh start. Bankruptcy is a complex legal process that requires expertise and guidance from a qualified professional.
A bankruptcy attorney can help you by:
- Evaluating your financial situation and advising you on whether bankruptcy is the best option for you
- Explaining the differences between Chapter 7 and Chapter 13 bankruptcy and helping you choose the right one for your circumstances
- Preparing and filing all the necessary paperwork and documents with the court
- Representing you at the creditors’ meeting and any other hearings
- Negotiating with your creditors and protecting your rights
- Helping you complete the required credit counseling and debtor education courses
Business Name – DeLuca & Associates
Address: 4560 S. Decatur Blvd. Suite 302
Las Vegas, NV 89103
Phone Number: 702-252-4673