Many people avoid bankruptcy because they worry about the negative effect it will have on their credit. However, if you’re struggling with overwhelming debt, it’s likely your credit score is already suffering. As such, discharging your debts through bankruptcy can put you on the right path toward improving your score. With discipline and dedication, it’s possible to successfully rebuild credit within a couple of years of filing.

How to Recover From Bankruptcy

1. Budget & Save 

Anyone who wishes to file bankruptcy must go through credit counseling first. You can use what you learn from this to establish a monthly budget for any remaining bills you have. This will keep track of your spending and allow you to see if there’s anywhere you need to cut back. It’s also crucial to start setting money aside for unexpected expenses, so you don’t have to rely on loans or credit cards should an emergency arise in the future. 

2. Don’t Make Late Payments 

It’s essential that any debts you can’t discharge in bankruptcy, such as a car loan, mortgage, or student loans, be paid before their due date every month. On-time payments account for the largest percentage of your credit score, and being even one day late can undermine the hard work you’ve put in to increase your rating. Make it easier to manage your payments by setting up automatic bill withdrawal at your bank.

3. Check Your Credit Report Often 

Your credit report is a record of your financial reliability. It includes all the details of your credit usage and payment history, as reported by lenders. It’s essential to check this regularly to make sure all the information on it is correct. Mistakes can lower your score, so if you find any, the appropriate credit bureau needs to be notified right away. You’ll want to follow up until the error has been fixed.

4. Be Cautious With New Credit

Applying for a secured credit card can be a fantastic way to start building credit again. It will supply the credit bureaus with new data about your spending activity, so they can rate you accordingly. The key to showing lenders you’re financially responsible is to keep balances low and pay them off every month. Make sure the creditor you choose will report account information to each of the credit reporting agencies.

To determine if bankruptcy is the right solution for your financial situation, reach out to Kratovil Law Offices, PLLC in Charles Town, WV, for assistance exploring your debt relief options. They understand that filing can be challenging, and their legal team is committed to ensuring the process goes as smoothly as possible. Backed by more than 35 years of experience in bankruptcy law, they’ve helped countless residents throughout the Eastern Panhandle get the fresh start they need. Call (304) 728-7718 to discuss your goals or visit them online to learn more about their services.