Filing for Bankruptcy: A Credit Recovering Guide

Sometimes when debt has gotten out of control and the money coming in will never even begin to pay the bills and still leave anything for basic living needs people are forced to file for federal bankruptcy protection.  After the bankruptcy proceeding has been completed and the debts discharged an individual really can emerge in one piece and ready to access the promised financial “new start.”

Post Bankruptcy Credit Repair

The bankruptcy will remain on your credit report for ten years.  The bankruptcy should be expunged from the report after ten years but there are certain exceptions where a credit report will be issued to inquirers which will continue to disseminate the bankruptcy information even after the ten years have passed.  If the debtor requests credit or life insurance worth $50,000 or more or if he applies for a job paying twenty thousand per year or more a report will be issued that reflects the bankruptcy.  Some people think that the best way to handle this type of situation is to ask for a face to face consultation with the potential employer or other entity in order to provide an opportunity to confront and explain the bankruptcy issue with them and to evidence your current debt management competence.     

Establish Positive Credit History

One of the best steps someone can take after a bankruptcy is to obtain and keep some kind of steady job to establish a stable employment history, establish a history of reliably paying bills for purchases on credit and maintain a checking account and a savings account with some funds in them.  Creditors may disregard bankruptcy credit black marks after about five years if there has been a solid credit history since the derogatory events.  Most credit reports will show a credit history of about two to three years and so if you pay every month on time then the report will show a steady and proper use of credit.

Get a Bank Loan

Bank loans can be used to repair a bad credit history.  Apply for a standard loan and when you don’t qualify ask if you offer property as collateral or agree to a pay very high rate of interest.  Because it will take about six to nine months for the loan to appear on the credit report wait about that period of time before completely repaying the loan.  The key to this exercise it find a bank that is going to report the loan to credit agencies so ask before signing and make sure there are no penalties for early repayments of the principle.   

Getting Legal Help

There is no magic bullet to recover from a bankruptcy credit implosion.  Time is the only real healer.  However, if you suffer any kind of improper discrimination due to the bankruptcy action or if a creditor tries to revoke a bankruptcy claim discharge it is best to contact a bankruptcy lawyer in order to have professional support and assistance in preserving your rights, health and financial future.