What Comes After Bankruptcy?
While there is plenty of information on how to go about filing for bankruptcy, many consumers are left wondering what happens after bankruptcy has been filed. There are definitely some consequences that the consumer faces after making the choice to file bankruptcy. Being aware of what lies ahead will ready the consumer for the future.
No matter what chapter you file, after bankruptcy you will find greater difficulty getting any lines of credit or loans, whether they are personal loans or business loans. This difficulty can last seven to ten years. Your credit rating will diminish, and your reduced rating will make you ineligible for many lines of credit. There are however, some bad credit lending options you can avail yourself of, but you will have to anticipate seriously high interest rates. Such rates are applied to loan and credit card offers because once you have filed for bankruptcy you are viewed as a higher risk by creditors and lenders.
If you cannot get lines of credit or loans, this may hinder your ability to fund certain things that you desire. You may find it more difficult to get a car loan or a home loan, even with a co-signer. You should know these issues in advance before you file; this way you can make a truly informed decision as to whether or not bankruptcy is really an option you want to pursue.
After bankruptcy, you may find it more difficult to rent a home too. If you are seeking an apartment you may find that you have to seek out property owners willing to rent to you despite your credit history. You may also have to explain to the property owner how you got into a financial mess and this can upset your privacy some. Nevertheless, take comfort in knowing that it will not be completely impossible for you to find an apartment to rent, but you may have to settle for the first apartment you can get versus the apartment you really desire.
After bankruptcy, you will want to start rebuilding your finances. Get yourself a savings account established and start putting money away for a rainy day. You will want to have at least six months worth of funds available to cover your bills, rent, and survival needs if you encounter any future difficulties. Establishing a savings account will also illustrate responsible spending and saving behavior. You will also want to establish a checking account and you will want to keep it in good standing as long as possible; don’t bounce any checks and keep a comfortable monetary cushion in the bank so you don’t overdraw your account. Again, this will help you in illustrating your new, responsible financial management behaviors to potential creditors.
After bankruptcy, pay your current bills and new bills on time all the time. In fact, pay them all early if you can. If you can demonstrate that you have really changed your ways, you may eventually pave the way to getting credit once more. In the meantime, if you do get credit offers, carefully consider their affordability and their necessity. Do not open accounts you do not need just because you can. Approach your new financial position with care, consider every action, and only seek out credit when it is absolutely necessary for you to do so.
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