Watching your Credit After Bankruptcy in New York City

Filing for bankruptcy will provide life changing debt relief, but it may also have a negative impact on your credit report and your ability to get new loans.  Credit scores have a big role in many aspects of our lives, so the speed at which a credit score will improve after bankruptcy can make a big difference in the decision to file.  While the word “bankruptcy” will appear on your credit report for up to 10 years, your actual credit score will likely improve approximately 15 months after filing.  There are several things you can start doing right away to repair your credit that your bankruptcy attorney may suggest. 

First thing we have our clients do in New York City is address any loans that survived the bankruptcy like mortgages, car loans or student loans.  After your bad debts are discharged it’s very important that the loans that survived are paid in full and on time every month with the money that has been freed up in your bankruptcy.  Doing so will help you appear like a responsible borrower and will help rebuild your credit quickly.  We advise our clients to arrange automatic payments to ensure a perfect post-bankruptcy payment history for these very important loan obligations.    

Most of our clients don’t realize that they will begin receiving new credit card offers before their bankruptcy is even finalized.  If a credit card can be used responsibly then it may be a good idea to get one post-bankruptcy even though the card will be likely to have a high interest rate and low spending limit. Still, using this card and paying it off every month will help rebuild credit, but you must be very careful to stay within your new monthly budget and not abuse the credit line.

Ironically, even after a bankruptcy in order to rebuild your credit score you have to use credit. It’s sort of twisted when you consider that the use of credit is often times the cause of bankruptcy, but that’s how the system works nevertheless.  So it should come as no surprise that credit card companies, banks and other toxic lenders will be rushing to give you another loan after your bankruptcy, happy to put you right back in the position you were in.  It’s up to you to play the game wisely, and to use these new lines of credit to help, not hurt, your financial situation this time around.   Most consumers learn a valuable lesson from their bankruptcy and with a little discipline, and the help of their attorney can successfully regain a positive credit score in just a couple of years.

If you live in New York, get the pros and cons of bankruptcy for your case from the Law Offices of William Waldner.  We will advise you about the best way to eliminate your toxic debts without hurting your credit for more than a few years.  Arrange a free consultation online or by calling 212-244-2882.  We are a boutique law firm that offers affordable debt relief assistance for all New Yorkers, and have a 99% Chapter 7 bankruptcy discharge record as of 8/31/16 in New York City.

This article is intended for educational purposes only.  By reading this article no attorney-client relationship has been created.