Chapter 7 Bankruptcy & Your Future

People can quickly think that Chapter 7 bankruptcy (or personal bankruptcy) is the end. It isn’t. Don’t fall into the trap of thinking only about short-term solutions. You can overcome personal bankruptcy.

If you have filed for Chapter 7—or are about to—fight the urge to be anything but positive. The mistakes or circumstances of the past are only valuable if you use them to your advantage. Learn from them. Don’t dwell on them.

Get A Steady Rhythm

The first step towards rebuilding your credit is to start being consistent, especially with your payments. Chapter 7 doesn’t wipe out all your debt. If you owe child support, student loans, and maybe even a mortgage payment, you will have to keep making them.

SIDE NOTE: If you are current on your mortgage before filing for Chapter 7 bankruptcy, you might be able to keep your house. If you are behind, you could wipe out your debt, but you will likely lose your home. Talk to an attorney about whether to file Chapter 7 or 13 if you want to keep your house.

The key here is to make the payments and to do so on time. Each one brings you a step closer to rebuilding your credit score. Be patient.

Easy Ways To Build Credit (Without Risk)

After you declare bankruptcy, you need to make payments to build your credit. But it may be challenging to get a loan or get a credit card. There are other options:

Secured Credit Cards
Credit-Builder Loan

Credit cards are either secured or unsecured. With a secured credit card, you put down a cash deposit. The credit card’s limit will not exceed the deposit. These types of cards are more accessible to obtain than a standard, unsecured credit card—and you can make your scheduled payments to boost your credit.

You also have a credit-building loan. Different lenders offer these in different ways. The general premise is that you choose a small amount of money—usually under a few thousand dollars. But it could be significantly less. Over 12 to 24 months, you make monthly payments. At the end of the loan, the money you paid gets released back to you.

Be careful

Lenders are not providing this service for free. There could be additional interest added to your payments. Also, some lenders will allow the money in your account to earn interest. Meaning you could take out (slightly) more than you put in. If you choose to pursue this, look at multiple lenders before committing. Get the best loan for you and your future.

Drucker & Mattia PLLC

Bankruptcy may be your chance to build a better future. Contact the experienced attorneys at Drucker & Mattia to set up a free initial consultation. Together, we can discuss your situation and come up with a personalized solution that fits your needs—and fits with your long-term goals.