CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Reestablishing Credit After Bankruptcy

According to the American Bankruptcy Institute, over 400,000 people filed for bankruptcy in the second quarter of 2010. This is on top of the over 373,000 people that filed in the first quarter of the year. These numbers lead experts to predict that 2010 will have the largest number of bankruptcy filings since 2005.

Bankruptcy is the first step for many people to get out from under overwhelming debt. But once the bankruptcy process is complete, consumers are forced to consider another major step in rebuilding their financial lives – reestablishing credit.

While finding credit may seem difficult after bankruptcy, there are steps you can take to find affordable credit now and make the process easier in the future.

Checking Credit Reports

A clean credit report can be your lifeline to obtaining new credit. The three major credit bureaus, Equifax, Experian and TransUnion, compile information on consumers’ credit accounts and payment history. This information is used by banks and lenders to determine the amount of credit they will extend and any interest rates on loans.

Despite the importance of these reports, they often contain errors. A report by the

National Association of State Public Interest Research Groups indicates that up to 79 percent of credit reports contain some sort of errors. After bankruptcy, it is important to review your report and make sure that all debts associated with the bankruptcy are properly noted on your credit report. This tells the banks and lenders that you are no longer responsible for the debt.

Secured Credit Cards

Though credit cards may have played a major role in debt issues, using a credit card responsibly is one of the best ways to rebuild your credit history. The most common type of credit card is the unsecured credit card, where the bank extends a line of credit not secured by any collateral. After bankruptcy, offers for unsecured cards can be a year or two away, if not longer. A secured credit card, however, is another valuable option for people to reestablish their credit.

In a secured credit account, money is deposited into the account and the bank extends a line of credit equal to the amount of the deposit, minus any fees. The deposit acts as the security, assuring the bank it will be paid back.

One drawback to secured credit accounts are the high fees often associated with them. It is possible, however, to find an account with reasonable rates and fees. You should also verify with the bank or card issuer that the payment history will be shared with the three major reporting agencies. If this is not done, using the card will do nothing to help develop your credit history or improve your score.

Also, with a good payment history, some banks will convert the secured account into an unsecured line of credit within one or two years.

Obtaining a Mortgage

While checking credits reports and demonstrating the ability to use credit properly are good initial steps, people ultimately want to know how long it will take to get the credit they need to buy a car or new home. Generally, most people are able to obtain conventional mortgage funding two years after they receive a discharge of their debts.

Getting Help

Other steps you can take to rehabilitate your credit include learning to live on a responsible budget, paying your bills on time and not maxing out your new lines of credit. It is also important to remember that even though you are taking the right steps, it will take some time to completely heal your credit report.

Experience has shown that many people after bankruptcy go on to reestablish their credit and are glad they filed. If you feel like you are falling behind on your bills or mortgage, it is important to get help early on in the process. Speaking with an experienced bankruptcy attorney, can inform you of your options both before and after bankruptcy.

Video Testimonials

Tampa Bankruptcy Law Blog

Here’s How You Can Rebuild Your Credit

How do you repair this damage and rebuild your credit after filing for bankruptcy? Many people believe that filing for...
Read More

How Can You Practice Smart Credit Card Management after Bankruptcy?

How can you learn better credit card management after bankruptcy? Using credit after bankruptcy is an intimidating experience for many...
Read More

How Do You Improve Your Credit Score?

How do you improve your credit score? Here's what you need to know. Your credit score plays an important role...
Read More

Does Bankruptcy Credit Counseling Work?

Bankruptcy credit counseling helps you emerge from bankruptcy understanding credit management. People filing for bankruptcy must take two courses regarding...
Read More

5 Things That Boost Your Credit Score

Your credit score has a major impact on your financial life. You can be a great person with a bad...
Read More

How to Correct Errors on Your Credit Report after Bankruptcy

How do you deal with errors on your credit report after bankruptcy? In a perfect world, you could ignore your...
Read More

Tips for Rebuilding Your Credit after Bankruptcy

One of the primary goals after filing for bankruptcy is rebuilding your credit. As tempting as it might be to...
Read More

I’m Starting a New Life and I want a Financial Fresh Start – Should I File for Bankruptcy Now or Wait?

As the say goes, “when it rains it pours.” If you’ve found yourself experiencing financial difficulties while also dealing with...
Read More

What Does It Mean to Get a “Financial Fresh Start” in Bankruptcy?

Financial Fresh Start You’ve probably heard it before. “Bankruptcy gives you a financial fresh start.” It’s something stated on this...
Read More

Tips for Overcoming the Negative Emotions of Bankruptcy: How Can an Attorney Help Me with My Finances?

As advantageous as bankruptcy is when you are struggling financially, it’s still a stressful experience. Some people have a tough...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo RG Seal

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions