Lynch & Belch, P.C.

Worried About Filing? You Can Improve Your Finances After Bankruptcy

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One of the reasons why people might never consider filing for bankruptcy is because they are worried about the effect on their credit scores. They might be concerned that filing for bankruptcy will make it too difficult to get a car loan, buy a house or even find a good apartment to rent. 

These concerns are valid, but you should know that filing for bankruptcy is not the last financial choice you will make. In many cases, it will give you the freedom you need to rebuild your resources, making it easier to save and recover in the future. If you are considering bankruptcy, you also need to know what to do after you file to give yourself the peace of mind you need to make this choice. You Can Recover Your credit your most important focus after filing will be improving your credit score. Your filing will stay on your credit report for many years, but this does not mean you have to be stuck with high-interest loans or bad rentals. If you're diligent, you can improve your credit score quickly by:

  • Paying your court-ordered payments on time. If you are filing Chapter 13 bankruptcy, the court will require you to pay a certain amount each month to creditors. You must make this payment in full and on time every month. It's the first step to regaining your credibility with lenders.
  • Making rent, utility and phone bills on time. Not only will timely payments help you avoid late fees, but they will give you a suitable track record for reliability.
  • Getting a pre-paid credit card. Some people are skittish about getting new credit accounts after bankruptcy, but a pre-paid card is a safe option for those who need to rebuild credit by otherwise cannot get a traditional credit account. A pre-paid card allows you to load money onto the card and then use it.
  • Using a co-signer. Is there someone in your life who is in better financial shape than you are? Some people have family members who can co-sign loans. If you pay the loan off each month, you can piggy-back on the co- signer's credit until yours has built up a little bit.
  • Keeping your balances low. When you do get a credit card, don't use it up to the limit. Instead, only use around 10-20 percent of your available balance.

You can talk to your lawyer about credit counseling options. The best solution for rebuilding credit is to stay simple. Simplicity helps you to stay on top of making your payments. You Can Put Money in savings you might have thought you could never put money into savings, but you can, even after bankruptcy. Many people have to file for bankruptcy because of catastrophic events outside of their control. Insufficient emergency funds and savings is what begins the cycle of debt that can be so difficult to break without the help of the law. However, after you file (either Chapter 7 or Chapter 13), you'll have freedom from some of your creditors, or you'll have a set payment plan in place. With this peace of mind, you can begin setting aside a little bit each pay period to save for a rainy day. After you're finished with your repayment plan, you can save the money you were spending to pay off your debts and put it toward your savings instead. You Can Get Debt ReliefThe benefit of bankruptcy is that after your case is approved, your creditors are not permitted to contact you any more about payments. Do not make a payment to collectors who come calling. If you still have collectors contacting you for payments, contact your lawyer. Most of your debt should be planned for or absolved in your case, and your lawyer can help you communicate with persistent creditors. For more information, contact us at Lynch & Belch P.C. We can help you get the financial restitution you need to start on your path to greater monetary freedom. 

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Lynch & Belch, P.C.
7210 Madison Ave.
Suite B
Indianapolis, IN 46227

Phone: 317-528-9549
Phone: 317-528-9549
Fax: 317-888-8282
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