Life after Bankruptcy Involves Rebuilding Your Finances
Helping you lay the groundwork for a debt-free future
At Invictus Law, P.C., we help you deal with bankruptcy proceedings and their aftermath. From our Santa Ana, California office in Orange County, we also serve Orange and Irvine, and from our Ontario office, we serve Riverside and San Bernardino counties.
Before you file for bankruptcy, you have to provide a statement that within 180 days of filing you will receive credit counseling that assists you in budget analysis. Unless you receive a waiver for this, this counseling serves you well as you adjust to your new financial situation after bankruptcy.
Rebuilding your credit after bankruptcy
If you have received credit counseling, you have a firmer understanding of how to avoid racking up debt on your credit cards. After your debts have been resolved through either Chapter 7 liquidation or Chapter 13 repayment, you can rebuild your credit in a variety of ways, including:
- Budget your money. Understand your family’s after-tax income and your necessary monthly expenses. Don’t buy what you don’t need. And for big-ticket items, see if you can put a little away each month to save up for them.
- Pay credit cards on time. When you’re just out of bankruptcy proceedings, your credit card limit is going to be low. You can opt for a secured credit card, that is, a card for which you deposit a specific amount — say $200 or $300 dollars. That becomes your monthly limit. Pay your credit cards on time.
- Pay loans on time. Installment loans, such as student or car loans, can also show you can be trusted. Pay them on time.
- Check your credit reports. Credit reporting agencies, such as Experian, TransUnion and Equifax, keep track of your credit. When you pay your monthly amount owed on time, both the creditor and the agencies look upon you favorably. And that’s reflected in your credit score. You can check your report from each of the three credit bureaus for free once a year. Look for:
- Inaccurate amounts owed
- Debts you didn’t incur (they could belong to an ex-spouse or someone with the same name)
- Debts you have already cleared
- Set up automatic payments. Paper-based bills can easily get lost or misplaced, and late payments incur extra fees you don’t need. By setting up automatic payments through your bank account or creditor, you have the peace of mind that your bills are going to get paid on time.
Bankruptcy stays on your record
Generally speaking, your bankruptcy under Chapter 7 or Chapter 11 or your debts not discharged under Chapter 13 stay on your credit record for 10 years from the date you file for bankruptcy. Discharged Chapter 13 debts remain on file, again generally speaking, for seven years. It’s part of the public record. That’s why it’s even more important to rebuild your credit after bankruptcy.
Bankruptcy affects renting or buying a house and applying for jobs
When renting an apartment or other housing to someone just out of bankruptcy, a prospective landlord may want to see evidence of your good employment history, your good rental or leasing history, and your credit report.
It may take a while to buy a house after bankruptcy. But with good financial planning and credit- building activity, you could be ready to apply for a loan in two years.
After you have filed for bankruptcy, federal law protects you. You cannot be terminated from your job during or after bankruptcy proceedings. Private employers cannot discriminate against you purely on the basis of your previous debt.
Learn more about what happens after bankruptcy in a free initial legal consultation
Invictus Law, P.C., with offices conveniently located in Orange, Riverside and San Bernardino counties, helps individuals and businesses rebuild their credit after bankruptcy. Call us anytime at (949) 287-5711 or contact us online to arrange for your free initial consultation. Se habla español.