Life after bankruptcy

"Can I get credit after bankruptcy?" A question I am frequently asked right after I have had to decline their mortgage application. You can get new credit after bankruptcy. The ONLY thing standing between you and good credit after bankruptcy is not knowing what steps YOU should take next. Today, so many people want to help you get credit after bankruptcy. There are even free seminars offering to help you get New Credit after Bankruptcy, where you can immediately sit down with creditors and get approved for a credit card, car loan, even a mortgage, right after your bankruptcy. But first, let's discuss bankruptcy and the causes of it.

Bankruptcy

Bankruptcy is a legal term that allows individuals or businesses who owe more money than they are able to pay to either work out a plan to repay the money over time or completely eliminate most of the bills. Bankruptcy laws has developed since the Chandler Act (1938) and the Bankruptcy Reform Act (1978), and currently the Bush Administration has enacted a new (2005) bankruptcy law on abuse prevention and consumer protection an act that may make it harder for some people to erase their debts by filing for bankruptcy. Creditors have the right to object to the discharge of certain unsecured debts, such as large purchases or cash advances made within 60 days of filing.

Bankruptcy results far more often because of events not in our control: loss of a job, health problems, disability, divorce, lawsuits, tax problems and more. Bankruptcy is meant to help people who just cannot find another way out. BANKRUPTCY IS A BIG step — one that will follow you around for seven to 10 years, depending on the route you take.

Discharge of Debt

Discharge of debt means that the person or business you owe the debt to can never collect that debt from you personally. Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, most student loans, court restitution orders, criminal fines, and some taxes. Discharge means the elimination of liability for a debt. Once you have been discharged of your debts you can begin working on restoring your credit. Under most circumstances, you will be prevented from establishing new credit without prior approval from the bankruptcy trustee.

You will want to make certain to get a signed copy of your debtors discharge and retain that copy along with your creditor's matrix because you will need to fax that numerous times during the first six months or more after your discharge.

Credit Repair

Repairing your credit begins with obtaining a copy of your credit report, examining it for errors, and contacting the appropriate reporting agency to have the error removed. Repairing credit after bankruptcy can improve credit scores in as little as 30 days. One of the most common misconceptions in bankruptcy is that the creditors whose debts were discharged through the bankruptcy will report the debt as included in bankruptcy without being asked to do so. Because most creditors comply with the letter of the law, when they received notice of 341 hearing, commonly referred to as a creditors hearing, they immediately place your loan or debt in a special legal status in order to prevent any accidental violation of the bankruptcy stay which is a federal offence. Because most debts are in collections or past due when the notice of bankruptcy is received, it typically will remain that way in the credit bureaus until YOU initiate some action on your behalf,

Credit reports should be immediately ordered online and for free through credit reference agencies like Experian, Check-my-file etc will be happy to charge you for them. I recommend AnnualCreditReport.com. This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

AnnualCreditReport.com is the official site mandated by congress to help consumers to obtain their free credit report.

By ordering your credit reports online, you can dispute every derogatory item that is reporting a balance and history that was discharged in your bankruptcy. Let me repeat this statement, ANY ACCOUNT THAT APPEARS IN YOUR CREDIT BUREAU WITH A BALANCE AND HISTORY THAT WAS DISCHARGED THROUGH BANKRUPTCY SHOULD BE DISPUTED. All that a creditor can report once you have been discharged is the open date, The Type of account and that it has been discharged through bankruptcy, NOTHING MORE, Period. If you FAIL TO DO THIS CRITICAL STEP immediate after your discharge, you should anticipate and lower credit scores than necessary and loan denials.

You should also correct any incorrect data like name variations, misspellings, addresses. Also remove any employment data in your credit bureau, it is unnecessary information for a credit score and will prevent rogue collectors unaware you have been declared bankrupt from calling you at work.

Credit cards

Obtaining credit cards after bankruptcy while on one hand may prove to be expensive, but then, they can help you secure a stronger footing in future with regards to your credit rating. Credit ratings are an important part of everybody's life these days. Credit-card companies won't be clamoring to extend you new credit once they see the bankruptcy note on your record, but you could get a secured credit card, which is basically a regular credit card backed by a security deposit you leave with the card issuer for as long as you have the account.

Establish a Good Payment History

Pay your utility bills and rent on time for at least a year. Pay your reaffirmed, pre-bankruptcy debts on time. Paying these expenses on a timely month-to-month basis is a quick way to demonstrate to future creditors that an individual is serious about their credit. Pay your credit cards off in full every two months. Pay your bills automatically from your checking account each month so that you can always be sure to remain current with new obligations.

Conclusion

Don't wait another minute to start rebuilding your credit after bankruptcy and regain control over your finances. Most importantly, it should be obvious by now that there is credit after bankruptcy. Another way to rebuild your credit after bankruptcy is to add years of positive credit history to your account. But while it has been easy to get credit after bankruptcy in recent years, the pendulum could be swinging back in the other direction. It's important to remember that any time someone offers you a loan, especially at this time of financial upheaval when you may feel desperate to get credit after bankruptcy, that they have something to gain from the arrangement, and they don't necessarily have your best interests in the forefront of their minds.

The ONLY thing standing between you and good credit after bankruptcy is not knowing what steps YOU should take next. Today, so many people want to help you get credit after bankruptcy. There are even free seminars offering to help you get New Credit after Bankruptcy, where you can immediately sit down with creditors and get approved for a credit card, car loan, even a mortgage, right after your bankruptcy.