Bankruptcy Credit Updates

Apr 29th, 2014 | By | Category: Debt

Most people believe that there is no life after bankruptcy, much less credit. If its the first time you have experienced bankruptcy, it is intelligible. People tend to feel after they have been declared bankrupt, no creditor will look at them. That no one will have faith in them anymore to extend credit to them. However, this isn’t true. You can help of credit even after bankruptcy.

Once you’re declared bankrupt, whatever assets you possess will be utilized to cover your debts. You will be scheduled to start afresh as far as your earnings and savings are concerned. But did you know that you can save your credit card even after you’re declared bankruptcy.

What this means as far as you’re concerned is because you have access to credit through your credit card. It could happen, of course, that your card company could just learn about the bankruptcy and have your card cancelled, the way American Express does to safeguard themselves against bad debts. But many companies let you continue to maintain and use your card provided you reaffirm the debt amount and this needs to be after you do the filing for bankruptcy. So your credit continues and it will, on condition that you assume the original amount of your debt.

Bankruptcy Credit: Expanding The Circle

Is there any rationale behind this? Creditors, as is understandable, do view bankruptcy as a threat. But they also see your line of credit as their business. If they cut this off, how will they recover the money that you owe them? They safeguard their own interests and don’t lose out by using bankruptcy to exchange credit for full payment of your debt.

It isn’t difficult to rebuild good credit after bankruptcy. In fact filing for bankruptcy in the camp is a good move in itself. It might be a huge blow to your credit report but eventually it will turn out to be a sensible move. Once you have eliminated debt by filing for bankruptcy you can make a fresh start by applying for bankruptcy credit card application. You should take care that you fill you bankruptcy credit card application properly. While filling up your bankruptcy credit card application make sure that all your paid expenses are shown as paid or else they would tag along and spoil your new credit report.

Bankruptcy will generally cause the most damage to your credit report. Chapters 7 and Chapter 11 bankruptcies remain on your credit report for 10 years from the date filed. A Chapter 13 bankruptcy will remain on your report for seven years from the date of filing. The accounts associated with a bankruptcy or debt settlement are removed from your credit report seven years from the first date of delinquency. Begin by consulting with a nonprofit credit counseling agency member of the …

You can either opt for secured credit cards after bankruptcy or unsecured credit cards after bankruptcy. A secured credit card after bankruptcy is a wiser decision than an unsecured credit card. These are secured by special savings account one establishes with a credit card issuer which serves as a security for his credit limit. An unsecured credit card is exactly its opposite. Once you have chosen a secured or unsecured credit card after bankruptcy make sure that you build up a good credit report. Building up a good credit report is absolutely essential if you wanna come to a good standing back again. For this, always pay your bills on time and also cut down your expenses to bare essentials. Another way to rebuild your credit after bankruptcy is to add years of positive credit history to your account. It is a slow and could be an agonizing process but once you build a good credit record, you’ll be in another league altogether.

Credit cards after bankruptcy while on one side may turn out to be expensive, but then, they can help you secure a stronger footing in future with regards to your credit rating. Getting a credit card after bankruptcy is one of the best means to begin rebuilding your credit score, if you’re careful and selective about choosing the right card and provider. Limiting the amount of auditors and the spending limits will help to maintain this in check. Having good recent credit will bring up an overall score and look much better on a report than not having any, especially when there’s a bankruptcy shown within the last two years.

Bankruptcy for most is wiping the slate clean and the opportunity to start afresh. The credit companies want to be here when that happens which explains why they enable you to continue using your card after bankruptcy. It isn’t as if there won’t be consequences however. There will be conditions imposed on you by the credit card companies after bankruptcy and you’ll have to meet them if you wish to hold on to your card. Youll find you have a lower limit and it’s a wise precaution that any company will take as you’ve just proved your unworthiness as far as credit is concerned.

So you’ll be muzzled and won’t be in a position to spend just you can afford to pay. Some companies make you shell out more if you want the honour of holding on to their card. This is yet another precautionary measure by companies. So while credit after bankruptcy is hard, its not impossible and you can enjoy it with some rules to rein in your spending.

FAQ’s: Bankruptcy?
How easy is it to re-establish credit after a ch 7 bankruptcy ???

  • The answer is, "it depends." With some lenders, as long as your bankruptcy remains on your credit reports you will be denied credit. The good news is, there are many "normal" lenders who are willing to work with you after bankruptcy. You just need to know where to find them. It's NOT about working with lenders that are convenient for you. It's about finding lenders that will work with you without taking advantage of your situation. Each lender sets their own "credit guidelines." What are credit guidelines? They are simply the minimum requirements you must have in order to qualify for credit with that lender. The three common credit guidelines for most lenders who work with people after bankruptcy are: (1) the amount of time you have since your discharge; (2) how you pay your bills after discharge; and (3) your FICO┬« credit scores. Time will heal. The maximum amount of time the dark cloud of bankruptcy follows you is up to 10 years. Remember, this dark cloud is only for a season in your life, not forever. Bottom line: the more time you have after your bankruptcy is discharged the more opportunities you'll have to get credit. But lenders also need to know you've recovered. Late payments after a discharged bankruptcy are bad news. Lenders need to see an early or on-time payment history to feel comfortable with you after bankruptcy. There is no escaping a lender who will judge us on our credit scores. This is why it is so important to increase your scores by deleting inaccurate, outdated, and unverifiable information from your credit reports. Your FICO scores are just too important to ignore. You need to make it a priority to keep your FICO credit scores as high as they can be. High credit scores are the key to unlocking opportunities that have been hidden from you.

  • It will be very easy. When I did it, People were sending me credit applications for credit cards and new phones & stuff. Be carefull because it will be just as easy to go Bankrupt again.

  • All depends on the lenders mood (economy) and how high your disposable income is (ability to repay new debts)

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