Many people about to file for bankruptcy have concerns about what will happen after the bankruptcy is complete. Most people know that a chapter 7 filing will affect their chances of credit approval, but don't despair. If you give in to your fears, your financial fresh start could be delayed. Instead, take time to learn about how a chapter 7 bankruptcy will affect your credit so you can move forward armed with facts.
How Long Will My Bankruptcy Stay on My Credit Report?
The federal filing notation will appear on your credit report once your bankruptcy is final. For those filing a chapter 7 bankruptcy, the notation will remain on the report for up to 10 years.
While the bankruptcy will be on your credit report for a while, you can take steps now to rebuild your credit. Your first steps should be to recognize the reasons why you had to file bankruptcy. If you do so, you might help prevent future problems with credit.
Why Do I Need to Know Why a Bankruptcy Was Necessary?
Often, consumers are the victims of circumstances. Some common reasons for bankruptcies are high medical bills, job losses, runaway credit card debts, divorce, and more. No matter what the reason, you have the power to do better in the future.
You can use credit more wisely, save for emergencies, and be more careful with your budget. In fact, gaining greater knowledge about your personal finances is actually a required part of the bankruptcy process.
How Does the Debtor Education Class Help Me?
Federal bankruptcy laws now require filers to take a class before their case becomes final. You can take this class online, by mail, in-person, and even over the phone. The focus of this class is to learn all about credit so that you can make better financial choices in the future. Course topics include:
- How to attain credit wisely
- How to have a good mix of accounts
- How to put funds aside for emergencies
- How consumer laws work to protect you
Filers must complete this class no later than 60 days after your creditor's meeting. To improve your finances in the future, you must also access and view your credit report on a regular basis.
Why Should I Monitor My Credit?
Even with the negative bankruptcy mark, your credit will improve gradually over time. Bankruptcies are supposed to remove the credit card and loan accounts you included on your bankruptcy paperwork. If present, these accounts should now show a closed status. Any accounts included in your bankruptcy that appear on the report in the current, open, or past due status means you need to take action.
If you spot any errors, you must contact the three main credit reporting agencies: Transunion, Equifax, or Experian. Once you correct any mistakes, you are ready to cope with offers for new credit.
How Should I Deal With New Credit Offers?
Many creditors monitor the federal bankruptcy filings and target consumers eager to rebuild their credit. Slow down and move carefully when applying for new credit. Read the small print on the bottom and back of offers and note the interest rates, fees, and more. Not all of the offers you receive are in your best interest.
If you follow the above guidelines, you will soon rebuild your credit after a bankruptcy filing. You can have the financial fresh start you need and move forward with confidence. Contact us at W. Mack Rice, P.A. Attorney at Law to learn more about bankruptcy. We can discuss what a bankruptcy filing can do for you and how it will affect your future.