In recent posts, we’ve talked about what bankruptcy is, who can file, what kinds of bankruptcy exist, and how one gets started. Now let’s talk about what happens after a bankruptcy. First, the order of the court is executed, whether that involves withholding of pay, liquidation of assets, or some other action. Next, your credit score is impacted.

This impact is likely to be very severe. People who successfully file for bankruptcy will find that a number of things that used to be easy are well beyond their reach: applying for home and car loans, some employment opportunities, and lines of credit with low interest rates or no fees. This can make getting back on your feet something of a challenge. Here are some tips:

1. Get a high-rate credit card. Bankruptcy doesn’t usually stop the constant flood of credit card applications from flowing to your mailbox. Apply for one of them, and make sure you pay your card off every month, and you’ll begin to slowly but surely rebuild your lost credit. It is very important to limit the number of cards you have, and to never miss a payment. Ever.

2. Get a secured credit card. This is a special credit card where the line of credit is tied to a savings account or other means of securing the debt. The trouble with these cards is that sometimes payments are not reported to credit bureaus—make sure they are, and you can use the card’s ability to send you alerts as you approach your limit to make sure you don’t overspend.

3. Get a store credit card. This is a variation on option 1, with the added bonus that you get the 10% (or whatever) discount the store offers when you sign up.

4. Get a loan to buy a CD. A Certificate of Deposit basically means you hand money to the bank for a specific period of time in exchange for interest. If you take out a loan, buy a CD, and pay your loan payments on time, you build credit, and make money.

5. The nuclear option. You could, in fact, go credit-free. The bankruptcy gives you a clean slate, so you could simply choose never to sully it again. This means you’ll do without some conveniences, but for some people it’s worth it.

Whichever method suits you, be sure to speak to a credit repair professional to make sure there aren’t any loose ends holding up your credit recovery.

It's Important To Clean Up Your Credit After Bankruptcy..


Which program is best?

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