Things to know regarding credit, post-bankruptcy

If you're currently facing financial problems and are considering filing for bankruptcy, you may be hesitant because you're worried how it might negatively affect your credit score. It's true that Chapter 7 or Chapter 13 bankruptcy will lower your score but just like a financial crisis is almost always temporary, so is the record of your bankruptcy.  

If you know what steps to take to begin rebuilding your credit rating, you may find yourself back on track sooner than you'd imagined. One thing's for sure: You are definitely not the first, nor will you be the last person to undergo serious financial strain in New Jersey. A key to financial recovery lies in what type of support you access as you're exploring options to overcome the obstacles you now face. 

These tips may be useful in your situation 

To know where to begin to lay the groundwork for restored financial stability, you first need to take a close look at your current financial status. The following ideas will help you get a feel for where you're at and may point you in the right direction to boost your credit rating: 

  • Access your credit score. There are free annual reports that will show your current credit rating.
  • You may notice errors on your current credit report, which can negatively impact your score. Report them and request corrections.
  • Know that Chapter 7 bankruptcy remains on your credit report approximately three years longer than Chapter 13. The latter typically stays on your report for seven years, the former, 10 years.
  • Obtaining a secure loan or secure credit card may be just the ticket to helping you rebuild your score.
  • You may also consider asking someone to co-sign a loan for you. 
  • Any solution that allows you to make regular payments in a timely manner will help you rebuild your credit.  

Bankruptcy doesn't necessarily have to be a negative experience; in fact, many New Jersey residents have found that using such tools not only helped them access immediate debt relief, perhaps save their homes and other major assets, they have also been able to wipe their slates clean and work toward stronger financial futures.  

You may want to talk to a friend or family member who has successfully filed for bankruptcy to ask whether they think it's a good option in your case. If personal conversations about your finances seem a bit too intimate, you can tap into outside support resources from someone well versed in bankruptcy law.

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