So You Have Filed For Bankruptcy! What Happens Next?

Posted by admin on June 28, 2010

Now that everything is over you’re probably realizing you’re not sure of what to do next—what happens after bankruptcy?    Well, not much–unless you make it happen.

All of your past debts on your credit report should be marked down as “included in bankruptcy”. After your bankruptcy has been discharged order a copy of your credit report and make sure everything you have listed in your bankruptcy has been noted as such because often companies will leave your past debts marked as overdue or late. Have those negative items noted as included in the bankruptcy. When you notify the credit reporting agency be sure to include the case number so they can verify it.

If you let your past problems make you feel ashamed, and avoid doing anything about your finances after bankruptcy then your credit score will remain very low. Keep in mind that this is but one moment in time and in time this will all age off of your credit report. Now is the time to build a new credit history.

In order to build up a new credit history, and a new life, you need to take charge and make things happen. Get a secured credit card and this will be the first step in rebuilding some new credit history. Use this new secured card lightly, less than thirty percent of your limit, and pay it back each month to show that you have learned from past mistakes.

The second step is to build up an emergency fund. While this won’t directly affect your score, it is a discipline that will help because if something breaks you’ll use your savings instead. With $1,500 in a savings account when you have unexpected expenses you’ll be prepared.

The third piece in this puzzle is a newer automobile. Many people feel that they won’t qualify for an auto loan but with the current economic problems that isn’t so. However you probably won’t qualify for a loan from a major bank. Get pre-qualified for an auto loan, go shopping and have fun. If you have a steady income of at least $1500 per month you will qualify. Being pre-qualified you will be given an approval notice that you give to the auto dealer when you select your new car. Don’t let them talk you into more automobile than you are prequalified for; they will try. Stay with the plan otherwise you will be in trouble again. The interest will be a little higher than you prefer but that cannot be helped now. That will improve down the road.

You may be inclined to sit back and avoid your finances after everything you’ve been through, but if you don’t make it happen, nothing will happen after bankruptcy, and eventually you’ll come to regret that. Build up a new healthy financial history and you will be pleasantly surprised at how quickly your credit score rebounds.

Disclaimer: This information has been compiled and provided by www.1-800BadCredit.com and www.1-800BadCreditBlog.com as a service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person’s situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.