Consumer Law Center of Maryland
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Getting Back on Your Feet after Bankruptcy

Questions about bankruptcy

If you’re planning on filing for bankruptcy, or are in the process now, you’re not alone; just under 1,000,000 bankruptcies were filed nation-wide in 2014. You may be concerned that life after bankruptcy will be challenging. While it takes time to clear all bad debts from your credit history, there are proactive steps you can take to improve your creditworthiness. Below are some guidelines for how to move on after filing bankruptcy.

Get a credit card, and keep the balance low: Right after your bankruptcy filing is complete, you may receive lots of offers in the mail for credit cards that have very high interest rates, or come with large activation fees. While some of these offers may not be in your best interest to take, the best way to build your credit score is to show financial institutions that you’re now capable of paying off balances fully, and on time. Research the best card options for people with poor credit, and use it for day to day expenses. Don’t make any purchases with the card that are not within your budget, and pay your balance at the end of each month. In time, you’ll receive more favorable credit offers with larger balances, and by keeping the ratio of your balance to your available credit low, your credit score will improve.

Put large purchases on hold for now: While many of your debts may be discharged in bankruptcy, or altered so that the payments are more affordable, one thing won’t change: your credit score. The financial woes that led to you qualifying to file bankruptcy will also result in a low credit score that the bankruptcy completion will not alter. With good financial decision-making and timely bill-paying, this score will rise, but for the time being, expect to be unable to qualify for large loans or purchases such as mortgages or small business loans, and try to find someone who may be able to act as a cosigner for you.

Keep an eye on your credit score: While it can be helpful to leave accounts on your report that you’ve successfully paid off, sometimes old debts that have been satisfied or discharged may still appear on your credit report as outstanding obligations. Keep a close eye on your credit report via the three main credit reporting agencies. As you continue improving your credit, ensure that bad debts are cleared from your credit report, and that the bankruptcy itself is removed after at most 10 years from when you filed.

If you need help determining whether bankruptcy is for you, and how to best take charge of your finances after a bankruptcy, speak with the Maryland consumer law and bankruptcy attorneys at Haeger Law Center, at 888-463-3520.