Phoenix Bankruptcy Lawyer: What To Expect After Bankruptcy
Phoenix Bankruptcy Lawyer Tips has for you today a common question asked by many
. Would you like to know a little bit about what you can expect after bankruptcy?
It's always said by a lot of people that after filing bankruptcy it ruins your credit rating. And do you know who says this the most? It is the lenders. Really, people that are going to issue you credit.
Here are our thoughts on that and why I disagree with them.
You can file bankruptcy more than once; I've represented several people who have filed second and third bankruptcies. So clearly, they weren't ruined for life after filing bankruptcy.
Now we hate to see people return to file bankruptcy. We always think that's incredibly unfortunate. But for those that we have done, clearly, they were able to get more credit.
The biggest concern for individuals is after bankruptcy they should actively go out and get credit. They should start rebuilding their credit from the day they file. Become a hawk about your credit report. Watch it closely.
The first step you want to take is you're going to apply for secured credit cards as soon as you file. And clients always ask, "Where am I going to get that money?"
The question is remembered once you file you're not obligated to pay any of those debts that you've now put into the bankruptcy. As a result, make a point of putting some savings aside and acquiring secured credit cards.
The next step that you're going to take is updating your credit report as often as possible. Take a page from what people do who have great credit scores. Put yourself in the mindset, even though you've just filed bankruptcy and you're correct, bankruptcy is probably going to drop your score about 200 points.
Many people haven't been paying their bills for several months. So their credit has already taken a ding. The other issue is for people who haven't stopped paying because they fear they're going to lose their credit score. If you consider all the debt that they're carrying, that's not helpful for the credit score, either.
So,look at secured credit cards.
The next thing that will happen is you're going to receive lots of applications for credit card offers. Read those carefully and take the best offers that you receive. Then review your credit every six months. And always apply, again, for credit. The more and longer credit scores you have, the more important that is to your score.
So, for example, say you charge and pay off every month. After you've done that for six months, ask for an increase of credit. Because what's important on your credit score is the amount owed versus the available credit.
So say, for example, I have $20,000 in available credit, but I have charged up $19,000. So we really only have an available of a thousand. I'm going to have a low credit score. Now say I've just filed bankruptcy. And what I've done is I've gone out and I've gotten a couple of secured credit cards. So now I have $3000 of available credit. And because I pay it off every month, I have available credit of $3000.
So I'm actually in a better position rather than having a huge credit balance with very little available.
The other thing that credit scores are rated on is the length of the credit history. So that's why we always counsel clients, "Go get a secured credit card as soon as you file." Two years is considered a good length. And after a two-year period from bankruptcy, you should have a credit score of 680 or higher. And that's important.
So really, yes, you will be affected in the beginning. But, again, we talked about with any long-term plan with two-year planning; you can have a much better credit score. There should be no late payments in that two-year period.
For a person that are retaining their cars and they've been current, that's excellent credit right there. Again, have filed bankruptcy, but with a long credit history, you could offset that 200-point hit that you're going to take.
There's a lot that you can do to really hold onto your credit after bankruptcy and acquire better credit and more credit and put yourself in a position to acquire a home within two years, to purchase another car. A lot of things can be done there. So it's not what lenders make it out to be, that you're destroyed. That's simply not true.
As a Phoenix bankruptcy lawyer we know.
by: Christy Thompson
Filing for Bankruptcy Credit Card Debt Settlement – A Legitimate Solution To Avoid Bankruptcy Chapter 13 Bankruptcy Filing Procedure Debt Settlement Options - How to Avoid Bankruptcy? Bankruptcy: Chapter 7 And Chapter 11 7 Things You Should Know Before Choosing Bankruptcy Trustee In Canada Interesting Facts About Bankruptcy Are You Thinking Of Bankruptcy How To Avoid Filing For Bankruptcy NJ Bankruptcy Attorney - Where to find the good ones! Are You Eligible For Chapter 7 Bankruptcy Filing? Bankruptcy Is Not The Only Option Bankruptcy Laws: Facts And Information