Can You Repair Your Credit Following Bankruptcy?

By Bill S Dunn

Many individuals who are in a derogatory financial condition may not want to consider a bankruptcy because of the damaging stigma associated with it. However, if you can no longer make your usual payments and you are in a downward spiral, bankruptcy may possibly be the best solution because it permits you to start again.

When you are having trouble making ends meet and you are not able to catch up your credit payments it can create a good quantity of stress. The additional strain of having collectors calling and knowing that you don't have the cash to catch the payments up can have an effect on not only your finances but also your long-term wellbeing. Also, it is smart to consider that the late payments will likely stay on your credit report for 7 years in any case.

A bankruptcy may be considered as the last choice but it may be the best way to get past your economic troubles and finally get ahead. You will be able to begin again without the undue strain and you will be able to get started back in the right direction. All of your energy can then be focused on improving the things that you can improve like your job situation or income rather than the late payments that you can't catch up.

A bankruptcy will stay on your credit report for 7 to 10 years but late payments will also. Both are destructive to your credit score but the fact is a bankruptcy will allow you to start over without the anxiety whereas getting farther and farther behind in making payments will only extend your financial pain. And with each passing year, it will be easier and easier to get credit so your financial life will get better and better.

Starting again by getting rid of your debt and filing bankruptcy may be the best way out for turning around a derogatory economic situation. Starting again will permit you the opportunity to turn things around while trying to keep up with payments that you can no longer afford just keeps you in economic tribulation.

Immediately following a bankruptcy you can start to reconstruct your credit. You almost certainly will not be able to get a usual credit card or loan but you can start with a secured credit card or a small loan from your local bank or credit union. You may also have to pay a higher interest rate but if you only borrow a small amount that should not affect you too much. Just make sure that you pay regular payments for at least 3 to 6 months and always be on time.

If you submit an application for a secured credit card you will need to put $500 or $1000 in a savings account that will be utilized as guarantee for your credit card. Many credit card companies provide this type of service and it can be an outstanding way to rebuild credit.

Your credit will start to get better at once as you begin to take these steps. It will take some time but you will be making progress. Filing bankruptcy may not be your first choice of action but if you are drowning in late bills it may be the only sensible solution to turn your economic life around. - 31382

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