How To Recover From Chapter 7 Bankruptcy
Chapter 7 bankruptcy is one of the more popular types of bankruptcies to file as an individual. If you have been dealing with financial burden and had a large pile of debt, this was likely your last resort. While it is often seen as the end of the world, it doesn't have to be. With the right methods and credit building strategies, you can survive and move on from your bankruptcy.
Avoid New Lines of Credit
Once your bankruptcy is complete, you may want to start building your credit right away. However, do not do this immediately. Not only does it not look great when you apply for new credit immediately after filing for bankruptcy, but credit card companies and lenders know your situation. They are aware you can't file for bankruptcy again for a certain period of time, and may take advantage of that by pulling you in with a high interest rate.
Take Personal Financial Classes
If you feel that you are facing bankruptcy because of lack of knowledge of budgeting and personal finance, taking a class is a great first step. You can learn a lot from classes and seminars about personal finance, from learning how to stick to a budget, to how to properly build your credit after bankruptcy. You may come out of the class with a new strategy for building your credit and recovering from this ordeal.
Start With Small Lines of Credit
Instead of building your credit with a major credit card or auto loan, start small with a very low line of credit. A good way to do this is by getting a department store credit card. This is ideal because you don't need a high credit score to get one, and the total credit line is low. Choose a store you shop at regularly, but never charge the entire balance. Make one or two small purchases each month, and pay the bill in full before it is due. This will slowly start building up your credit.
Try a Different Type of Credit Card
Another option for recovering from bankruptcy and rebuilding your credit is by getting a secured credit card. This will report to the credit bureaus as a normal credit card, but the balance is whatever amount of money you deposit onto the card. If you deposit $200 for the card, that is the total amount you can charge. Like the store credit card, use it at least once a month, but keep the charges low. Pay your bill every month on time, and you will start noticing an increase in your credit score.
Contact an attorney like Dennis Lee Burman Attorney at Law if you need more help with a chapter 7 bankruptcy, and what to do after you file
