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How to Rebuild Credit After a Texas Bankruptcy

October 14th, 2018 at 9:51 pm

Texas bankruptcy lawyerThough many people think a bankruptcy can ruin their credit for the rest of their lives, that is not necessarily true. When you file for a Chapter 7 or Chapter 13 bankruptcy, it stays on your credit report for at least seven years. Though that can be disheartening, you should not worry too much – you can start to rebuild your credit right after you file for bankruptcy. Often, people find that their financial situations and credit scores are even higher than they were before bankruptcy, given you can change the reason you became buried in debt. Though it can seem daunting, rebuilding your credit score after you file for bankruptcy is crucial. Here are XX ways to help build your credit back up.

Create a Budget

One of the first ways you can make sure you are on the track to financial success is by creating a monthly budget to keep track of your spending. There are numerous websites and apps that can help you do this, but they all essentially do the same thing – take your monthly earnings and subtract monthly expenses, budget for a few luxuries and then use what is left over to pay off debt, invest, or deposit into a savings account.

Open a Secured Credit Card or Use a Cosigner

After you have filed for a bankruptcy, credit card companies see you as a high-risk borrower, meaning there is a greater chance that they will not get their money from you. This can be a problem because one of the main ways of building credit is through credit cards. A way around this is opening a secured credit card, which is slightly different from a traditional credit card because you must put down a deposit to open the card. Another option would be to open a traditional credit card, but have a cosigner agree to pay off the debt if you for some reason are not able to.

Consider a Secured Loan

Credit scores are not all about credit cards – many types of debt are taken into consideration when determining your credit score, so it is good to diversify your debt. Again, lenders are going to see you as a high-risk borrower, so many will likely not allow you to take out a traditional loan, but you may be able to take out a secured loan, which functions much like a secured credit card. Secured loans allow you to borrow money that you already have deposited and some allow you to may payments toward a certain amount, though you would not have access to those funds until all payments were made.

Contact a Kerrville Bankruptcy Lawyer

Though filing for bankruptcy can be intimidating and even embarrassing for some, often bankruptcy is the only choice. By hiring a knowledgeable Boerne bankruptcy attorney, you can ensure that you are doing the right thing for your finances and your family. Bankruptcies can be damaging to your credit score, but there are ways you can rebuilt them. Contact the Law Offices of Chance M. McGhee to discuss your options. To schedule a consultation, call the office at 210-342-3400.

 

Source:

https://www.nerdwallet.com/blog/finance/rebuild-credit-after-bankruptcy/

 

The Truth behind Bankruptcy Filing

July 16th, 2014 at 1:23 pm

bankruptcy filing, credit scores, impending bankruptcy, medical debt, San Antonio bankruptcy attorney, Texas bankruptcy attorney, unemploymentAmericans file for bankruptcy each year as the result of owing more money to creditors than can actually be paid. While often times the term “bankruptcy” is stigmatized and correlated with poor spending habits and large credit card bills, the truth is it is a necessary practice for economic relief in dire times.

Most people who file for bankruptcy are not irresponsible, nor are they trying to use the process as a means of simply walking away from their debt. US News stated in an article, citing a study by The Bureau of Labor Statistics, that as of April 2012 more than 5.2 million people across the country had been unemployed for six months or more. In addition to unemployment as a factor, money lost due to divorce is also a large contributor to outstanding debt, as well as medical expenses.

There are several other common misconceptions about bankruptcy filing and those who file. Consider the following misunderstood and misinterpreted bankruptcy concepts everyone should know:

  • Bankruptcy filing ruins credit scores permanently: Although many believe they will never be able to get another loan or credit card after filing, this is not necessarily the case. You may have to start slowly, but making regular payments on loans will gradually increase your score.
  • Bankruptcy may not forgive all kinds of debt: This is a widely held belief that often is not true. Certain types of debt and payments are not absolved with bankruptcy. These include obligations such as alimony and child support, some kinds of student loans, and any type of criminal fines.
  • Use of credit cards with an impending bankruptcy: Be wary of using your credit cards right before you file, and never deliberately run up your bills under the assumption that it will be forgiven. This practice has been deemed as committing fraud in the past, and you run the risk of getting stuck with the bills after the process anyway.

If you are struggling with debt problems in the San Antonio, Texas area due to job loss, medical issues, or any other reason, seek help from a San Antonio bankruptcy attorney today. Contact the Law Offices of Chance M. McGhee for all of your bankruptcy needs, and to start the process of financial relief and recovery.

Call today for a FREE Consultation

210-342-3400

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