Going through a bankruptcy can be difficult, stressful, embarrassing, and damaging to your credit rating. Still, the fresh financial start promised by the bankruptcy promise is often well worth any consequences for those who qualify for bankruptcy protection. With a solid plan, bankruptcy petitioners can successfully recover from bankruptcy and restore their credit standing within a short time after filing. Consider some crucial tips regarding rebuilding your credit and regaining your financial health post-bankruptcy. 

If you file a Chapter 7 bankruptcy, wait 90 to 120 days after receiving your discharge letter before checking your credit report, so the national credit bureaus (Experian, Equifax, and TransUnion) have time to update the bankruptcy information. Credit accounts discharged under Chapter 7 bankruptcy should be listed as “discharged in bankruptcy” and a zero dollar outstanding balance. If not listed as “charged off,” you should dispute the inaccuracy. If any credit accounts were not included in the bankruptcy discharge, make sure they are not listed as discharged and that payments are reported accurately. When filing a Chapter 13 bankruptcy, wait 90 to 120 days from the date of your Chapter 13 bankruptcy filing before requesting your credit reports. Credit accounts included in the Chapter 13 bankruptcy may or may not reflect an accurate status. Creditors are not required to report payments received during Chapter 13 repayment plans, but some will report. Make sure that any credit accounts excluded from the Chapter 13 bankruptcy are accurately reflecting payments. Once the payment period is complete and the Chapter 13 discharge is received, wait 120 days and check all three major credit reports. Ensure that all loans discharged (or paid) by the Chapter 13 bankruptcy are listed as closed with a zero balance. 

While staying on top of your credit report is essential, it’s just as important to properly manage your current income and expenses. Put your income and expenses down in writing each quarter (at a minimum). Stay on top of your expenses and live within your means (spend less money than you make), so you can take advantage of your fresh financial start. 

Re-examine patterns in your past that led to bankruptcy. For some, the negative financial patterns will be spending – for others borrowing or failing to repay debt. Whatever negative patterns are evident, make sure not to repeat them. Avoid past mistakes (and new ones) with a realistic budget based on achievable money management goals. A budget based on realistic reflections of the current financial situation and goals is vital when creating a new, healthier financial path post-bankruptcy. Once you understand your credit situation and your current finances, you can start rebuilding your credit. Most start this process by obtaining a secured credit card. 

If you need to file bankruptcy and have questions about the credit repair process after receiving a debt discharge, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times. 

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