Rebuilding your creditworthiness after bankruptcy

At our law firm, we assist New Mexicans who face insurmountable debt with facing their financial problems with creativity and from a position of strength. A variety of approaches to these issues exists, but often our clients ultimately decide to use bankruptcy as the main tool for financial recovery.

Bankruptcy stays on your credit record for 10 years if you used Chapter 7 liquidation bankruptcy and seven years for Chapter 13 wage earner reorganization bankruptcy. This fact, however, does not have to mean that your financial recovery is on hold during that time. There are many things you can do to rebuild your credit score and make lenders and creditors more open to working with you in the future.

Some creditors may actually view bankruptcy as positive. It means that the debtor has taken steps to stabilize him or herself financially and eliminate excessive debt that was preventing financial health. A debtor emerges from bankruptcy as less of a credit risk than before, in most cases.

Take carefully planned steps

Still, the path to credit recovery takes attention to detail over a sustained period of time. Some of the things that can be done to speed the process of credit recovery include:

• Pay every bill, loan payment and installment agreement on time.
• Pay more than the minimum amount due if it will not put you into any financial strain.
• Slowly seek to obtain new credit and then create a stellar repayment record. Choose your credit applications carefully so as to only apply if you have a high likelihood of approval. Consider a secured credit card.
• If you still have sources of previously approved credit (like credit cards) open after you emerge from bankruptcy, do not necessarily close them.

This is only an introduction to a broad topic with many angles and approaches. A bankruptcy attorney can answer your questions about credit recovery after bankruptcy and provide detailed guidance.