We can not foresee the future, and there are times when we have become so financially overburdened that our only way out is through filing bankruptcy. Bankruptcy exists to alleviate financial hardships that have become too great to overcome, and for many, it is an option that provides a starting point for the rest of their financial future.
Bankruptcy alone will not improve your financial status, it what you do after you have filed for bankruptcy that will get you back on the road towards a brighter financial future. Even though your credit may have taken a hit during this process, there are ways to bounce back from bankruptcy.
Bankruptcy Settles The Score, It Doesn’t Wipe It Clean
It is a common belief that bankruptcy wipes your credit history to a clean slate. In reality, it clarifies that your obligation to your debt is no longer required, and the bankruptcy will remain on your credit report for seven to ten years. If you follow a few important steps and practice financial responsibility, you will be able to improve your credit report more quickly.
Pull Your Credit Report
The first step to make after your bankruptcy is complete is to access your credit report. This free service will provide you with your credit history so that you can make sure all the debt that was included in your bankruptcy is properly noted on the report. Any unpaid debt, or incorrectly recorded debt, can continue to be detrimental to your credit score and can be reviewed with credit counselors to rectify.
Check Your Credit Report Monthly
Continuing to check your credit reports monthly for the first two years after your bankruptcy is important to building responsible financial habits. This will keep you abreast of what is taken off of your report, when it is removed, and how your score is affected. It will also help you learn what negatively impacts credit scores and how to avoid those actions in the future.
Make Paying On Time A Habit
Payment history is a large portion of your credit score, which means it is imperative to make payments on time, every time. As you rebuild your credit history post bankruptcy, remember that consistent and on-time payments are the single most significant factor in how your credit score is calculated. This means also being on top of all other bills such as utilities and other obligations to make sure they do not fall delinquent and go into collections.
To help keep your payments on time, any accounts that you can set up with a direct payment draft for regular payments will greatly reduce the risk of your bills falling behind and will help you stay on a financially sound budget. Direct payments also make you more confident in your ability to handle your financial obligations.
Find Out More About Bankruptcy And How It Affects You
Bankruptcy can be your new beginning to a healthier financial future, but it takes your effort and commitment to use this time to get back on track and headed in the right direction. If you have any questions about how bankruptcy can affect your future, or if it may be the right decision for you, contact Bankruptcy Attorney Upland for more information.