People don’t choose to file for bankruptcy because it’s an “easy out.” In most cases, talking to a bankruptcy attorney in St. Charles, MO, is the last resource but becomes unavoidable. Today, one of the most common reasons for filing bankruptcy is a serious illness that resulted in enormously high medical bills.
People often wonder what life will be like after a bankruptcy. Has their credit been destroyed forever? Will they ever be able to buy a home or car? How long will the bankruptcy stay on their credit report?
Credit Cards
Applications for “pre-approved” high-interest credit cards will probably appear in the mailbox much sooner than expected. Credit companies know that no one can file for a second bankruptcy for eight years, in the case of a Chapter 7 bankruptcy. They also realize that the person is in a better position to make payments and will, hopefully, run up a high balance. Don’t accept any of those early card offers. In fact, it’s much better to save and use cash. However, if a credit card is a must, wait until your credit score is over 650 when it’s possible to get a better deal.
Healing Your Credit Rating
• Don’t use a “credit repair” agency. You can do anything they can do.
• Technically, the bankruptcy will remain on a credit report for 10 years. In practice, a lender will look most closely at the most recent history, but be prepared to explain why the bankruptcy was necessary.
• For the first six months after the bankruptcy, pay bills on time and don’t apply for credit anywhere. Start building that positive credit history. This is also the time to start a regular savings program. Build up a rainy-day fund of at least $3,000.
• Six months after the discharge, apply for a secured credit card with a bank. You will deposit enough money to equal the credit limit of the card. Use the card and pay the bill in full every month.
• Two or three years after a bankruptcy, assuming a clean credit history with no missed or late payments, it could be possible to get approval for car financing or a mortgage.
An experienced bankruptcy attorney in St. Charles, MO, can help you get your life back under control. The Law Offices of Steven K. Brown have been helping people get a second chance for over 30 years.
