Bankruptcy Isn't Forever
Have you been told that filing for bankruptcy will permanently ruin your credit? Or maybe you’ve heard that if you pursue bankruptcy protection, you will never be able to use a credit card, take out a car loan or buy a home again. These are bankruptcy myths.
After bankruptcy, your credit can be repaired and you can restore your financial freedom. At Khan Law, we help our clients throughout the Tri-Valley and East Bay region of California not only obtain bankruptcy protection, but also prepare for life after bankruptcy.
How To Rebuild Your Credit And Restore Your Financial Freedom
The truth is that filing for bankruptcy and having your debts discharged or reorganized will affect your credit. However, you can begin rebuilding your credit immediately after bankruptcy.
Within a year after filing for bankruptcy, many of our clients see increases in their credit scores. Eventually, they buy cars again. In time, many buy homes.
The first step to repairing your credit after bankruptcy is simple — just get a free copy of your credit report. When you receive your report, examine it for errors. Dispute mistakes promptly.
In addition to monitoring your credit report, there are steps you may take to rebuild your credit and strengthen your financial footing:
- Be careful and intentional with your finances. Create a manageable budget and stick to it.
- Pay your bills on time.
- Build an emergency reserve. This will help you avoid using credit cards and ending up with debt when unexpected expenses arise.
- Avoid predatory lending and payday scams. Predatory lenders often seek people with low credit scores and charge them huge fees to borrow money.
- Weigh the pros and cons of opening a secured credit card account. These cards are secured by a deposit; you can only charge 50 to 100 percent of the deposit. Secured cards may have high annual fees.