Email this page to a friendCan I recover from personal Bankruptcy?
Yes! Perhaps one of the biggest concerns for any individual who files for personal bankruptcy, either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy is whether not they can recover financially. People often ask themselves this question because they have conflicting information or they hear some of the many rumors about recovering from personal bankruptcy. Some of the most common rumors about the after affects of personal bankruptcy are that one can never obtain credit again, that it will take seven to ten years to obtain new credit or that one will never be able to obtain a home or car loan. These rumors are false! Anyone who files for personal bankruptcy, either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, can recover after the successful completion of the personal bankruptcy and most of the time the recovery will be much faster than if they did not file.
The first step to recovering and rebuilding after the successful completion of a personal bankruptcy, either a Chapter 7 or a Chapter 13, is to remain current on secured debt payments. A secured debt is a debt that is attached to a piece of property. In other words, if you fail to make to make the debt payments, the creditor can take back that property to satisfy the loan in whole or in part. For example, car loans or home mortgages are examples of commonly held secured debts. Payments of these debts not only allow you to keep the property, but they will also cause secured creditors to report positively on your credit report. Positive reporting on your credit report will improve your credit score and enhance your chances to incur new debt and obtain better terms on future debt.
Another step is to pay down or pay off debt which was not discharged in your bankruptcy. While either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy can discharge most types of unsecured debt, the bankruptcy laws prevent the elimination, or discharge, of some types of debt. For example you will usually still owe on student loans, debts obtained by fraud, child support, court ordered restitution, recent taxes and government fines even after a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy is successfully completed. If you continue to payment on these debts the credit will report positively on your credit report and your credit score will continue to improve.
The next step is to consider whether or not you should incur additional unsecured debt, such as credit cards. It might seem antithetical to incur new credit card debt after your old credit card debt has been eliminated in a Chapter 7 Bankruptcy or partially paid back in a Chapter 13 Bankruptcy. However, paying on time or paying credit card debt each month in full is another way to rebuild your credit and help you recover after bankruptcy. From some people this means charging $50.00 per month, but for others it might mean charging $200.00 per month. One should only use the credit as tool, and change only what one can afford to payoff at the end of the month. You should not charge more than you can afford to pay in full when you get your bill. If you are in a situation where this is not possible, you should concentrate on other ways to rebuild your credit.
Further, you should review your credit reports after you have successfully completed either a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. You need to make sure that the debts from your personal bankruptcy are accurately being reported as discharged, and that hard work after personal bankruptcy is being reported properly. If you discover that your credit history is not accurate, you should file a dispute with the credit reporting agencies to avoid losing the benefits of a personal bankruptcy and your post-bankruptcy efforts through mistakes.
Recovery after personal bankruptcy, whether you have filed Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, is not only possible, but is the very reason why many people file for bankruptcy. Personal bankruptcy gives you a fresh start and an opportunity to recover financially. It If you want additional information about personal bankruptcy myths or recovering from the filing of either Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy you should contact a Legal Helpers attorney right away.
