What to expect after bankruptcy
Website design By BotEap.comBankruptcy can offer a new lease on life by canceling unsecured debt and making monthly living expenses more affordable. But bankruptcy is nothing to enter into lightly or choose without first considering the long-term consequences of filing. For many people, a low credit score is a small price to pay for being debt free, especially when they are well-informed about moving forward and rebuilding their credit after bankruptcy.
Website design By BotEap.comstart again
Website design By BotEap.comMost people who file bankruptcy have credit card debt, so the thought of ever having a credit card again can be scary. Of course, it’s better to live within your means and save for purchases to avoid debt. However, your credit score is important and will not improve unless you take steps to rebuild your credit. Immediately after filing bankruptcy, your credit report will show the bankruptcy itself, plus any late or missed payments from your past. By making full and timely payments on any bills you have, this positive track record will soon dwarf the negative ones. It’s a good idea to apply for a small credit card, even if you have to start with a secured account with a high interest rate. Make small purchases and pay all the bills each month, and you’ll see your credit score improve. You’ll soon be able to negotiate a better interest rate, which can make all the difference when you use credit for larger purchases in the future.
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Website design By BotEap.comIf possible, it’s best to wait a while after bankruptcy to finance a car. If this isn’t an option (for example, you lost your car in bankruptcy and don’t have enough money saved to make a cash purchase), be prepared to pay a high interest rate after making a large down payment. The longer you can wait to do this while using your small credit card, the lower payments you’ll end up with. As with any debt, be sure to carefully review your budget to make sure the payments are easily manageable.
Website design By BotEap.comYou may be able to buy a home within a few years of filing bankruptcy. The lender will review your credit score and history before you apply, as well as your current situation and income. Most lenders will require a hefty down payment, and you may have to go through more paperwork and approval paperwork than other buyers, but homeownership is definitely an option.
Website design By BotEap.commaking a move
Website design By BotEap.comEvery bankruptcy is different, but sometimes filers also have to deal with eviction or foreclosure as part of their case. Others may choose to move to a more affordable rent to make monthly expenses more manageable or want to upgrade after their debt is paid off. Regardless of the reason for moving, a new rental always includes a credit check. A bankruptcy will not necessarily disqualify you from renting a home, but this depends on the landlord or rental company. It is best to let your potential landlord know ahead of time so they are prepared when you get your report. Some people even enclose a letter explaining their circumstances and showing that they can now pay the rent.
Website design By BotEap.comThere’s no need to delay
Website design By BotEap.comFiling bankruptcy can be disappointing, but for many people it is the best possible option. Instead of having a credit report showing staggering debts and late payments, you could file for bankruptcy followed by clean credit. If the introduction is unavoidable, the sooner you do it, the sooner you’ll be heading in a positive direction.