Repairing Your Credit After Filing Bankruptcy

Financially speaking, it is not an unusual happening for people to find themselves in too deep.  Debt is an overwhelming norm for many people, and it is one of the most difficult hurdles to clear in life.  Sometimes, the best way to manage personal debt is to file for bankruptcy.  

The immediate freedom from past debts may seem like a fresh new beginning, but there are many challenges that lie ahead in life after bankruptcy.  Though repairing a damaged credit history is no small feat, there are plenty of easy ways to work towards that goal.  

Take a moment to read through this short summary, highlighting some of the most practical ways to improve a person’s credit score after bankruptcy has been completed.

Understanding the foundational repercussions of bankruptcy

Most people who have already gone through filing bankruptcy already know just what they have done to their financial records, but it pays to be informed.  Filing Chapter 13 bankruptcy will remain on a person’s credit report for up to seven years.  Chapter 7 bankruptcy filings can remain on record for up to ten years after a court’s ruling.  

Bankruptcy is no free pass to relieve a person of their debts.  It will affect the filer’s credit report, and their life, for quite some time.  A bankruptcy is a terrible thing to see on a person’s credit history when they are asking for money.  Bankruptcy should always be a last resort.  

For the first couple of years after bankruptcy

Though filing bankruptcy is a low point in a person’s financial history, there is plenty of room to recover.  For the first few years after filing bankruptcy, a person’s ability to rebuild their credit is extremely limited.  A hearty income will offer a little relief from the restraints, but only a little.  

Owning a home also helps a little, because maintaining scheduled payments on a person’s mortgage will slowly boost their credit rating.  The first few years after filing bankruptcy are the worst.  Most credit agencies will not offer credit, and it will be harder to find housing if the individual does not own their home.  

Finding financial footing after damaging debt

Once there has been enough time for the bankruptcy to be old news, individuals can begin branching out financially once again.  This part of the recovery should also be conducted with caution and patience.  The mistakes that led to the bankruptcy in the first place cannot simply be repeated.  Self awareness goes a long way in the realm of personal finance.  

Beginning the road to financial freedom

Once the bankruptcy falls off of a person’s credit report, it is time to live with a little more financial freedom.  Now is the time to apply for that loan the family has been needing to build that mother-in-law suite.  By now, there should be more education and more financial discipline in place, and maintaining a positive payment relationship is no longer an issue.