Filing for bankruptcy is a difficult decision, and it’s one that comes with considerable questions for the filers. One thing that’s often important for these individuals to think about is what life will be like after bankruptcy.
For some people, one of the primary questions is whether they’ll be able to rebuild their credit after the bankruptcy is completed. The good news is that this is possible, but it will take considerable work.
One important factor to remember is that you can’t start most of the rebuilding process until the bankruptcy is over. Opening new credit accounts is forbidden while your bankruptcy case is open, so you shouldn’t consider doing that.
What can you do while your case is open?
You can start the rebuilding process by creating a budget that’s realistic. Be sure to include all of your expenses so you have an accurate view of what you can afford. During the bankruptcy process, you’ll have to go through credit counseling, and you’ll need to take a debtor education course. You can use the information you learn in both of those to set up a plan for your finances after divorce.
What should you do once it’s closed?
When the bankruptcy is closed, you can start to take more steps to rebuild your credit. Because the bankruptcy is on your credit history, this can be a challenge. It may be beneficial for you to open a secured credit card to get started. This enables you to put a deposit that’s equal to your line of credit. You’ll still make a monthly payment. As you make these payments, you’ll be able to boost your credit history, which will increase your credit score. As time moves forward, you may be able to further improve your credit as long as you continue to use the credit you have responsibly.
Filing for bankruptcy is a major financial decision. It may behoove you to discuss this matter with someone familiar with the process so you can determine if this is the best option for your situation.