Filing for Chapter 7 bankruptcy is not an easy decision to make. Most immediately, you worry about your home, your car, where you and your family are going to live, and if you’ll be able to keep or get a job. Sometimes, filing for bankruptcy is a relief because the repeated debt-collection calls will finally stop.
Then you begin to wonder if your finances will ever recover enough to buy a home or a new car at some point in the future. Today’s blog from Checkett, Pauly, Bay & Morgan, LLC, discusses how your finances can recover from Chapter 7 bankruptcy.
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Get a Secured Loan Using Your Savings Account
After Chapter 7 bankruptcy, you can begin to rebuild your credit. Open a savings account and get a secured loan based on the amount of your deposits. Community banks and credit unions often have less-strict rules for getting these kinds of loans. The downside is that you can’t access your savings account funds until you pay off the loan. However, even a loan for a couple hundred dollars can help improve your credit score.
Get a Secured Credit Card
Secured credit cards work on the same principle as secured loans. You pay a deposit, and a credit card company may extend a line of credit to you based on that amount. The downside is that the credit card company often charges high interest rates because your credit score is low. Be sure to pay the entire balance on your credit card by the due date every month, so you won’t have to pay those high interest rates.
Ask Someone to Be an Authorized Credit Card User
After Chapter 7 bankruptcy, ask a family member if you can become an authorized user on that person’s credit card account. Make sure the lender reports all authorized users to credit bureaus, not just the main account holder. Contact the credit card first to confirm this information.
Have Family Co-Sign a Loan
Asking a family member to co-sign a loan is a huge favor to ask. It’s also a relevant way to rebuild your credit if the family member has a good credit score. A co-signer risks his or her own credit by vouching for your ability to make regular payments on the loan. Make absolutely sure you can pay your debts when you ask for someone to co-sign your loan.
Make Payments on Time
It’s vital that you make payments on time. Creditors will look at your recent credit history when deciding whether or not to give you credit, even if you have a Chapter 7 bankruptcy filing on your credit report. Use your credit card responsibly, keep your balance low, and pay off your credit card balance in full every month.
Chapter 7 Bankruptcy Filing With Checkett, Pauly, Bay & Morgan, LLC
The experienced bankruptcy attorneys at Checkett, Pauly, Bay & Morgan, LLC, understand that considering bankruptcy is stressful. We can help alleviate your fears and anxiety about this process. Contact Checkett, Pauly, Bay & Morgan, LLC, or call (417) 358-4049 for more information on what filing for bankruptcy can do to your credit. The first consultation is always free.