By Carly Calkins -
There can be moments after any bankruptcy discharge when a person feels enormous relief.
Upon completion of your bankruptcy filing, creditor harassment, once a rampant feature in your life, will likely cease.
And, if you don’t have time to spend time avoiding creditors, then you can spend time focusing on getting your financial life back on track.
Nevertheless, post-bankruptcy situations can also be very alarming. A common rumor is that you won’t be able to get credit for ten years following your bankruptcy filing.
Of course, when you’ve just filed bankruptcy, your credit will probably not be strong.
This should come as no a surprise given your previous credit card debt, unpaid bills and threats of foreclosure.
Fortunately, however, this understanding allows for attention to be paid to other important concerns.
Here are some things that you can likely expect:
• You may be bombarded with offers of low-balance credit cards to help you “rebuild” your credit. Unfortunately, many of these offers may be from unscrupulous creditors, and they may come laden with activation fees and membership fees that push you near your limit before you’ve ever used the card. At that point, late fees and over-the-limit fees will appear, and you’ll be looking at the same dilemma that may have forced you into bankruptcy originally. The solution? Be very careful when choosing your new credit accounts. There are some reputable lenders out there who will give you a legitimate chance to re-establish your credit. Be patient and deliberate in determining which offers are on par and which are just too good to be true.
• Upon bankruptcy, you probably won’t immediately qualify for most conventional mortgages, car loans and other similar loans. Fortunately, for those who pay their bills on time following [http://www.totalbankruptcy.com/]bankruptcy, these loans will likely be available to you within two to three years following discharge. Anyone seeking a car loan knows this is no small amount of time, but it certainly beats the 10 year rumor.
• And yes, you’ll probably pay a higher interest rate for the first few loans or credit accounts that you apply for. These rates are tied to your three-digit credit score and your scores will be low following bankruptcy. The good news is that the negative items on your credit history have less and less bite over time, as you add good credit on top of them. The more recent items will mean much more to your score, so keep those items as current as you can.
The bottom line is that your credit was probably in bad shape before bankruptcy, and it will not be immediately improved by the process.
But, without old debts weighing you down, you will have a chance to rebuild credit. If you are careful and responsible, you will likely emerge with credit stronger than when you filed, and with that, you will probably see more opportunities with lower interest rates and favorable terms.
Don’t forget that a bankruptcy attorney may be able to tell you even more about what your life after bankruptcy will look like.
Talk to a bankruptcy lawyer to find out more about the reasons for filing, the process itself and what your future may hold following your discharge.
Carly Calkins
writer from Chicago
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