After filing bankruptcy, many clients really do understand the good, better, and best use of credit, or in other words, they’ve become “credit-savvy.” For one thing, they’ve completed two education programs which are required under the new bankruptcy rules. And, another thing, they’ve walked the walk – the path that led to bankruptcy and then beyond.
After bankruptcy, you can say you’ve already discovered the worst use of credit which is starts and ends with excessive expensive credit use. And after bankruptcy it’s going to be much easier to be cautious about charging anything you’ll not be paying off within the month. You’ll not be incurring interest or other charges, you’ll feel like a victor instead of a victim because you’ve acquired new credit smarts along with the fresh start of bankruptcy. So here are a few new habits of the sorrier but wiser consumer who is:
1. Rid of almost all credit cards. If unsecured credit card debt was part of your bankruptcy, then you probably ended up with all your credit cards canceled. That’s OK for now. Right now, you want to live only on your current income. In time, you may want a secured credit card with a very small credit limit. Leaving the high limit cards for a time may actually demonstrate how paying for credit card use (interest and fees) may not be , when you have a better credit rating and perhaps a better income.
2. Able to resist temptation to check out every offer of new credit that comes in the mail. Credit card companies buy lists of public data, they will soon be aware of your bankruptcy. Just because your fresh start bankruptcy has caused a lot of credit companies to offer you small lines of credit, don’t fall into to the trap of accepting them all. Pick one offer with reasonable terms and stick with it. Throw the other offers in the shredder. Applying for too many credit applications at once will just lead you back to your old problems.
3. Knows the value of being consistent with paying your remaining bills on time or early. If your total monthly expenses are still high enough to require you to “juggle” the bills, then you need to either find more sources of income, or you may need to trim the monthly budget more.
4. Up-to-date about credit report and credit scores. Obtain your credit report about 60 days after the completion of your bankruptcy. Your creditors generally have no more than 60 days to correct your credit report after your bankruptcy discharge. After that, the discharged balances on your report should now read zero balance, nothing due. If one or more creditors are not bothering to update the new status of your debts, don’t hesitate to dispute them over it. It doesn’t hurt to also include in your letter, the fact that is illegal for creditors to still be reporting discharged debts.
There may not be any “magic bullet” or quick-n-easy way to do credit repair after bankruptcy, but consistent and responsible efforts are guaranteed to pay off, and all in your favor. Just overcome the temptation to fill your wallet with all the new (high fee, high interest, restricted use) credit card offers that you are bound to get after completing bankruptcy.
Bottom line: Consistent bill paying and refusal of unnecessary or over-expensive debt – these practices add up to producing the best habits of using credit responsibly and reaping the highest rewards for doing so.
The advice of an experienced bankruptcy attorney can help you determine your options and action plan in light of your income, assets, and the nature of your debts. This analysis will enable you to complete a Chapter 7 or Chapter 13 bankruptcy, the first step in achieving the debt relief you need to pursue your financial goals. Please contact our Sacramento office at 916-313-9069 or via email at firstname.lastname@example.org