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Photo of attorneys Shelley Slafkes and Bruce Levitt
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Moving Forward: Rebuilding Your Credit After Bankruptcy

On Behalf of | Aug 7, 2018 | Life After Bankruptcy

If you have recently obtained a discharge of your debts through bankruptcy, or the finish line to your bankruptcy proceedings is in sight, then you deserve to breathe a sigh of relief. But while you enjoy this new world where a pack of creditors can no longer harass you, it is also important to take the steps necessary to move forward with your life responsibly. After all, you now have an opportunity to rebuild your credit and work toward financial health.

Take Time to Reflect

Now is not the time to celebrate by wasting money. Rather, this is a great time to reflect upon how you found yourself in the position of insurmountable debt. Then, make sure that you do everything in your power to prevent history from repeating itself.

Create a Tight Budget and Stick to It

If you have obtained bankruptcy relief through Chapter 13, then you have spent the past three or more years on a payment plan. This means that you have become accustomed to living on a tight budget and making financially wise decisions. This is to your benefit and you should absolutely continue to live this way.

In contrast, if you obtained discharge through Chapter 7 bankruptcy, then you have obtained relief in a matter of months. This means that you did not have the tight years-long budget that Chapter 13 debtors experience. Therefore, you have not had the same practice in living frugally. Develop a budget and stick to it.

Monitor Your Credit

Regularly monitor your credit report and credit score. Your bankruptcy discharge serves as an injunction from creditors regarding the discharged debts. Make sure that discharged debts or new unidentifiable debts do not appear on your credit report. You cannot move forward if creditors are influencing your credit score with unlawful collection efforts. Speak to your attorney if old debts continue to appear.

Credit is Not a Bad Thing, If Used Responsibly

Making wise financial decisions does not mean you have to completely avoid taking on credit. In fact, if you are able to obtain a merchant credit card (i.e. Target, Walmart, Amazon, Costco, etc.) and you: (1) use autopay to always make timely payments; (2) never borrow more than you can afford to pay; and (3) always maintain a zero balance, then this will help you rebuild your credit. But again, we cannot overstate how important it is that you only take on loans you can afford to pay and that you always pay on time.

You Need a Bankruptcy Attorney

If you are struggling with debt that you just can’t shake, you should consult with an attorney about bankruptcy. At Levitt & Slafkes, P.C., we provide intelligent, thoughtful representation to our clients. For 30 years, our attorneys have advised and skillfully guided clients by creating and implementing customized debt relief plans. Let us help you. Call Levitt & Slafkes, P.C., at (973) 323-2953, or reach us online to schedule a free consultation.

We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years.