How can I improve my credit after filing for bankruptcy?
Repairing your credit after bankruptcy can seem impossible. If you haven’t already gotten legal advice with a bankruptcy attorney, you may want to consider the option. Knowing how to repair your credit can be crucial when you want to improve your credit score after bankruptcy.
Improving credit with budgeting
For instance, you can figure out your monthly budget to compare your income against your living expenses. If you have a clear outline of your budget, it could help you keep track of your spending habits.
This would also be a good time to try paying with cash. When people use cash to pay for expenses, it usually forces a person to spend on just what they need, which in turn may lead to saving money.
Paying bills on time
Having a clear budget can also help you pay your bills on time. This action is really important while you are trying to rebuild your credit score.
It would also be a good idea to also watch your credit score and periodically check that there are no errors made to your paperwork.
Getting a credit card
After a bankruptcy, you may also be feeling apprehensive about opening up another credit card. However, this method is often the best way to improve your credit score again. You may get a secured card, where the bank offers you a limit on the card depending on the deposit you give them. When you close the account, you can get your deposit back from the bank, but it would be advised to read all the fine print on these cards before applying for one. There could be hidden fees and rates that you may want to consider before trying this option.
This also goes for the unsecured credit card. It may also be a good idea to use the credit card sparingly for maybe a certain set of items such as gasoline for your car. This way, you are less likely to overspend and put yourself back into bankruptcy again.
Savings account to secure loans
You may also re-establish credit with a line of credit by utilizing your savings account to secure the loan. However, if you are looking to apply for a car loan, or take out a mortgage, you might be better off holding out for a couple more years until you have established an improved payment strategy and are more stable with spending and budgeting your money.
Repairing credit and time
Remember that the credit repair process may take some time and the longer you maintain a job and steady income, the better your chances of improving your score and keeping a healthier relationship with your credit agency. Even if you still struggle to get a lender, it may help to write a letter explaining your financial situation and the struggles this hardship has brought you. Also, it may be advised to be weary of those credit scams that claim they will help fix your score. Repairing your credit score after bankruptcy can be done on your own.
The statute of limitations on debt
What are the statute of limitations on debt if there are any? If you are depended on Social Security and have credit card debt, you may want to find out how to take care of your payments immediately. Sometimes the bankruptcy fee may be too expensive, but there could be a statute of limitations for your debt. What is the best option in any case?
The statute of limitations on written contracts is five years. The statute of limitations on open accounts is four years. However, Social Security income is exempt from execution of a judgment. A maximum of $1,250 per month of annuity income is exempt. Depending on the amount of his annuity income, he may be entirely judgment proof and there would be no need to file a bankruptcy.
This answer pertains to individuals in the state of Idaho.
Location: Boise, Idaho
Phone: (855) 776-7872