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You can rebuild your credit post-bankruptcy: 2 tips

On Behalf of | Feb 7, 2023 | Chapter 7 Bankruptcy

Times are hard for many people across the country just now. In fact, millions of people are struggling simply to pay their household bills. 

When facing financial hardship, it can sometimes feel like you are running out of options. Nonetheless, there are always options and the most important thing is to be proactive. If your debts have spiraled out of control then bankruptcy is one thing you may want to consider. 

The word bankruptcy still carries with it certain stigmas and it is known for having a negative effect on credit. While there will be a short-term impact on your credit rating post-bankruptcy, it doesn’t take that long to start rebuilding. Outlined below are a few ways to do this. 

1. Make on-time payments 

The key to rebuilding credit post-bankruptcy is to start small. Focus on paying your household bills and essentials on time and cut out any luxuries you do not need. By making payments regularly and on time, your credit score will increase within a matter of months, and then you can start thinking about more luxurious items again. 

2. Have reserves for emergencies

Unexpected expenses such as medical bills are one of the most common causes of bankruptcy. A problem with insurance could mean that you have to cover the full costs of emergency treatments. By putting a little bit away each month, it’s amazing how much you can start to save. An emergency fund could help prevent your debts from spiraling out of control again. 

Bankruptcy can give you the breathing room needed to get your finances back on track. When facing financial hardship of any kind, it’s important to assert your legal rights. Having experienced guidance on your side will help ensure that you make the appropriate decisions.