Having done debt relief work for my clients for well over three decades, I can predict some of the questions I am going to be asked in my consultation. And the ones I get most often are these two:
1. Am I going to lose anything in the bankruptcy?
2. How do I get my credit back after filing a bankruptcy?
The answer to question number one? No, in almost all cases.
The answer to question number two? Read on.
What amazes me most of all about bankruptcy filings is how quickly our clients are able to get their credit back. In some cases, and with some lenders, my clients receive credit the day the bankruptcy is over. And for the others? There are ways to maximize your chances of getting credit soon.
First, get a secured credit card. You can search online for these or ask your bank. What is a secured credit card and how does it work? A secured credit card is one that you use like any other charge card. The difference is that you are charging only up to the amount that is “secured."
When you are issued a secured credit card, the credit line is the exact amount that you have deposited with the lending institution. If you have deposited $500.00 with the company, you can charge up to $500.00, nothing more.
So what’s the point if you already have the money?
The point is that you use the charge to build your credit. Each time you charge and then pay timely, it is recorded positively onto your credit report. If you do this several times, you will be rebuilding your credit, one charge at a time.
The key is to just charge the things that you were going to pay for anyway with the cash that you have. When you need gas, make sure you have the money, go to the gas station, use your charge, and when the bill comes, use the money you had saved to pay the bill. When you need something from your pharmacy, use the same strategy. Don’t charge anything you do not have the money to pay.
After a short time, often within a year, you will find yourself with new, unsecured charge cards in the mail. When you get these new cards, be careful with their use. The idea is to get better credit for emergencies and lower interest rates on large purchases and not to get into trouble again.
Here is an additional tip. Payments you are making now, such as rent, utilities, mortgage, cars, and any other payment that are due, make sure that you pay them on time. Be careful your spending and you will be on your way to lower interest rates and to have the ability to deal with emergencies.