Often, my clients in Littleton, Aurora, and Centennial ask me about re-establishing their credit after filing for bankruptcy. It is a valid concern as many expenses, like a house or a car, are not affordable without a loan and without established credit. Getting a loan can be more difficult, however, following a bankruptcy discharge.
Debts and Credit After Bankruptcy in Aurora, Colorado
Bankruptcy takes care of most your debt like credit card debt and medical bills. There are some exceptions like child support, alimony, student loans, and court fines, but most debt gets wiped out when you file. If you file a Chapter 7 bankruptcy, it will show on your credit report for 10 years. That does not, however, mean that you can’t build up your credit in the meantime. In fact, you may start getting credit offers from car dealerships for car loans right after you file for bankruptcy.
New Loan Offers After Filing for Chapter 7 Bankruptcy: Should You Take Them?
If you had to file for bankruptcy, you should seriously consider when would be the right time to start taking on debt again. After all, debt caused you a ton of problems before and it got away from you. You are responsible for any debt you take on after filing and the loan you are offered right after filing for bankruptcy will most likely come with a very high interest rate. On the positive side, taking on a new loan will help you re-build a positive credit score. Remember, the further you get form the bankruptcy filing date, the more your credit score will improve. It may be best to hold out and start re-establishing a positive credit score in small increments before taking on a large loan.
Reestablishing Your Credit Score After a Greenwood Village Bankruptcy
Once your debts have been discharged, we suggest you get a credit card and use it sparingly. Pay off the balance each month by setting aside cash in an envelope each time you use the card. This will give you the assurance you can repay the credit card debt, while at the same time reestablishing your credit and credit score. After a year of this, you can consider buying an appliance or another medium sized item on credit, which will further build your credit score.
If considering a Chapter 7 or Chapter 13 bankruptcy in Colorado, call Barry now. Request your free initial consultation from an experienced, hard hitting bankruptcy lawyer, at 303-205-7870. You can also submit the “Get Help Now” form to begin your journey towards financial freedom. Barry will help you get the best, fresh start possible.