Buying a Home: Why Legal Help Matters

If you are planning or in the process of a bankruptcy, you will need to know how to re-build your credit after the proceedings. While it will take time to re-establish yourself and get back on track, there are some things to keep in mind during the process.

Rebuild your credit slowly and carefully after your bankruptcy:

Some debts can't be discharged. When you file for personal bankruptcy, you will be asked about the debts that you want to have discharged, or alleviated. There are some debts that you cannot typically discharge, such as child support, tax debt, or federal student loans, though these creditors will often work with you following a bankruptcy to help you get back on track.

Some loans won't help. When you discharge debts during a bankruptcy, you will likely have the option of maintaining some of your loans, such as your primary car payment or a line of credit. Payments made after your bankruptcy might not be reported to credit agencies and bureaus; know that even paying these debts on-time consistently may do little to help build your credit. New lines of credit are the most effective way at reestablishing yourself and improving your credit rating.

Check the laws frequently. Laws surrounding bankruptcy and credit reporting change often; when you pick up on news related to changes in bankruptcy laws, pay heed as these could impact you. Changes in laws and legislature could affect you- even though you have already filed or had debts discharged. This all contributes to your post-bankruptcy credit rating and report.  

Time could be of the essence. Once your debts have been discharged, you will be inundated with offers for credit cards, credit lines, and bank accounts. Before you extend yourself for any of these offers, check out the best options and the ones that have terms that you can realistically live with. Also, look for offers that will offer an opportunity to re-build your credit over time.  

Be patient. It will take time to re-build your credit, though new lines of credit and timely payments will make a significant impact on your credit score and report over time. Be patient, as it takes time for banks and lenders to report to these agencies, and you will eventually see your credit score rise, maybe even jump!

Use these suggestions and tips to slowly re-build your credit after your bankruptcy. Talk with a bankruptcy attorney, like Gruber & Associates, PC, about ways to best get back on track; these experts often require a credit counseling class before debts are discharged through bankruptcy, which can be very helpful. Over time, you should be able to raise your credit score and re-build your credit!