While bankruptcy takes an emotional and financial toll on anyone who files, many people recover quitewell by following a few simple strategies for avoiding future debt problems. Even though your credit report
will show a bankruptcy for up to 10 years on your credit report, that does not mean that your credit
score will stay low for that long. Many people find that credit scores soar into the 700s shortly after a
bankruptcy is over and the rebuilding process begins. In many cases, bankruptcy reassures debtors more
than an informal debt consolidation plan can, since the debtor is legally forgiven for most or all debt in a
bankruptcy, freeing the person up for possible future credit.
Establish a Budget
A vital step to take immediately following bankruptcy is to establish a budget to prevent any future debt
problems. The key to setting up a budget that works is to set one up that allows you to live on less money
than you bring in. As simple and logical as that advice sounds, it is not as easy to implement as one
might believe. To keep from going into future debt, an emergency fund must be set up for the unexpected
expenses that get so many of us in trouble with credit card debt. By setting up an emergency fund, you
won’t be tempted to use a charge card for all the surprises in life that tend to add up over time.
Pay Existing Bills in a Timely Manner
It is crucial to pay bills on time after a bankruptcy. By doing this your credit score will quickly recover. It
is important to remember that your credit will suffer greatly after bankruptcy if you start showing signs
of falling behind on payments. People just out of a bankruptcy are judged more harshly for the occasional
late payment than another person would be who has not been through a recent bankruptcy proceeding.
Obtain New Credit
Getting a new credit card might be the last thing on your mind after a bankruptcy. The truth is that you
need to get at least one new credit card to begin rebuilding your credit score. many people find that it is
easier to qualify for a secured credit card shortly following a bankruptcy. To obtain a secured credit card
banks require that you deposit between $200 and $1000 into a savings account as collateral to receive a
credit card with a similar limit.
Thanks for the great post, I have gotten some questions at my blog on how long it takes to recover. Do you think it is fair to say if you play by the rules (make payments on time) you can get your credit score into good standing after 10years?
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