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Friday, October 10th, 2008

by Theodore Sliwinski, Esq.

 There is Life After Bankruptcy!

Your ability to reestablish credit after you file for filing bankruptcy is better than it has ever been. After you receive your discharge, then you will receive many solicitations from credit card companies, and from other lenders. These lenders will offer you deals to to finance your homes and vehicle. Here are some tips on how to responsibly and successfully reestablish your credit:

1. Open a checking or savings account. Lenders may look at this to determine if you can responsibly handle money.

2. Apply for store and gas credit cards that you would normally pay cash.

3. Apply for a secured card where you deposit cash and charge against it. Pay advances back over two months so that they will be reflected as positive marks on your credit report.

4. Pay your utility bills and rent on time for at least a year.

5. Find a friend or relative to co-sign for you on a loan and pay it on time.

6. Search for car dealers and mortgage brokers that attest to be “bankruptcy friendly.” Purchase a used car so you do not get hit with the depreciation that occurs during the first two years of a new car purchase.

7. Avoid from payday loans that are at high interest rates and are a “bad credit” trap.

8. Write a letter to each credit reporting agency explaining the circumstances that lead to you filing.

9. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you simply do not need Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.

10. Pay the debts that you reaffirmed in your bankruptcy on time. If you reaffirmed your car loan or mortgage then pay it on time.