Filing for bankruptcy can give you a new start on life. For many, bankruptcy is the only way to eliminate debt in a timely manner. However, bankruptcy does not come without a cost. There are a number of consequences that result from filing for bankruptcy. These issues are not insurmountable if you meet them head-on.
Before repairing your credit, it is important to understand your situation. Here are a few consequences you may experience after filing for bankruptcy:
- Your bankruptcy will remain on your credit card for up to a decade.
- Lenders will likely avoid you for a while because you had your previous debts written off. This makes you a risk.
- You may have difficulty getting a credit card or a loan until your credit has been repaired.
- When you are offered a loan or credit card, the interest rates and fees will be severe.
The good news is that it only gets better from here. You are debt free and ready to rebuild. Here are a few tips to help you rebound from bankruptcy:
- Reassess your spending. Evaluate what led to your bankruptcy and what mistakes were made. This time, try to lead a more frugal lifestyle. At least for a while, you should focus on basic expenses such as food and shelter. Avoid frills and luxury items. If you can’t afford to pay for something completely right now, don’t buy it.
- Build your credit. You will need to get a new credit card to begin building your credit. Any purchase you make with this card should be paid off immediately. Do not let yourself start to build up debt again. After years of proving your ability to pay off the card on time, you will be able to get additional cards and loan options and your credit score will go up.
- Pay your bills on time. Now that you no longer have debt, it should be easier for you to pay your bills. Never miss a payment and always pay on time. This will show potential lenders that you have learned your lesson.
To discuss if bankruptcy is right for you, contact an Orange County bankruptcy attorney for a free consultation. It may be the perfect way to start over, without the burden of heavy debts.