The immediate relief through bankruptcy and how to rebuild

The immediate relief through bankruptcy and how to rebuild

| Nov 25, 2020 | Chapter 7

When struggling with debt, it can be difficult to think positively about your future finances. If you choose to file for bankruptcy, you may worry about the hit to your credit score or the debts that bankruptcy cannot discharge.

When you discharge other debts, it can make it easier for you to handle the ones that remain. Bankruptcy does affect your credit score, but it also lays the structure for you to repair and build better credit.

Be free of debt after bankruptcy

Filing Chapter 7 bankruptcy is a solution to your struggle with debt, and one that you can bounce back from. While it takes 100 days to discharge your debt, you experience the benefits right away. An automatic stay forces creditors to stop all action against you. The calls stop and the letters stop, and you cannot lose your home or property during the process. So, you stave off the threat of foreclosure, at least in the short term.

Bounce back after bankruptcy

Bankruptcy remains on your credit report for up to 10 years, but you can restore your credit much quicker. As soon as you file for bankruptcy, FICO suggests that you check your credit report for any inconsistencies. Make sure that any accounts unaffected by bankruptcy do not have a bankruptcy status.

As time passes, bankruptcy’s effect lessens. Every positive point towards a good credit score counts. You can help reestablish your credit by obtaining a secured credit card. If you make all your payments, you will eventually be able to apply for a traditional credit card.