Can You Come Back from Bankruptcy?

Most people think bankruptcy is the kiss of financial death that leaves no chance to get back on financial track. While it is true that bankruptcy should be used as a last resort, it is not impossible to repair credit that has been marred by bankruptcy and make a financial comeback.

Here are some tips for coming back from a bankruptcy and boosting your credit score:

Begin the Rebuild

After you have essentially cleared all or most of your slate through bankruptcy, it is never too soon to start rebuilding your credit. Be sure that this is not an overnight process. You will have to practice patience and persistence to improve your credit past. The first step to rebuilding your credit should be obtaining a secured credit card. By making regular, on time payments in full you can begin to boost your score. It may seem somewhat illogical to get a credit card right after a bankruptcy but it is one of the fastest ways to rebuild a credit history and can be the first step back to learning good financial management. You also may consider taking a small personal installment loan from your bank or credit union which will help give you a more well-rounded credit report.

Watch For Scams

There are predatory lenders that seek out people with bankruptcies and bad credit. They do so because it is these consumers desperate for the financing assistance and lenders know that those in need will be more apt for accepting high interest rate and other seemingly unfair loan conditions and terms. It is very important that you research the company and the terms of the loan or line of credit before signing any agreements. Watch out for fees, unreasonable terms, and read the fine print to make sure it makes sense for your financial situation. Not all credit card providers and lenders are only out for the money but just be sure you can depend on the ones you are working with.

Have Reasonable Expectations

When you are trying to bounce back from bankruptcy it is key to have reasonable expectations of how fast the process will go. It is certainly not an overnight process and it does take effort. Bankruptcy will remain on your credit report for 10 years. During that time you have opportunities to make improvements to your credit score but you also have some time until the bankruptcy falls off your report. While it is true you can play the waiting game until the mark is erased, it is also true you will have difficulties getting financing during that time. You will pay more in interest and face more rejection.

Don’t Let History Repeat

Once you have filed a bankruptcy and have a reasonable chance for starting over, your main goal should be to never let yourself get in the same situation by over spending, extending your credit, or being out of control with your financial management skills. If you have already gone through a bankruptcy, you know how difficult it is to make ends meet. If you let that happen to yourself again, you may never be able to get back on track. Don’t let history be repeated. Get back on track and work hard to stay on the right financial path.

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