Bankruptcy Lawyer Springfield IL
Bankruptcy Lawyer Springfield IL
How to Repair Your Credit After Bankruptcy
After you file bankruptcy with the assistance of a bankruptcy lawyer Springfield IL residents trust, your credit rating will take a hit. However, understand that this effect is only temporary. You can take steps to repair your credit.
Continue Paying Your Non-Bankruptcy Accounts
While bankruptcy discharges most of your debt, it might not get rid of all of it. Find out which accounts weren’t closed, such as your student loans, and continue paying them. Try to make more than the minimum payment on these accounts so that you can lower your debt-to-income ratio faster.
Apply for a Credit Card
When you’ve just filed for bankruptcy, the idea of applying for a new credit card might sound crazy. It’s true that you will have difficulty getting approved for new credit right away. You may even have to pay more in interest and fees. The best way to get approved right now is to apply for a secured credit card. These credit cards require a cash deposit. If you make timely payments on this card, you can improve your credit over time and will have a higher chance of getting approved for unsecured credit cards.
Keep Up Payments With New Credit Cards
Once you get approved for a new credit card, make timely payments. If the credit bureaus see that you’ve been keeping up with your payments for months, your credit score could go up. If you have trouble remembering to make your payments, a bankruptcy lawyer in Springfield, IL may recommend enrolling autopay or setting reminders on your smartphone to make your payments.
Don’t Job Hop
Although changing jobs frequently won’t impact your score directly, it can make lenders think twice about giving you a loan. They might not think you have reliable income to repay the loan. That’s why you should avoid job hopping as much as possible.
Keep our Balances Low
Ideally, you should keep the balances on your credit cards as low as possible. It convinces lenders that you aren’t in over your head and that you will repay what you borrow. Try to keep your credit utilization ratio less than 30 percent.
Look at Your Credit Report to Make Sure Your Bankruptcy is Correctly Reported
Bankruptcy in itself damages your credit rating. However, if there are errors, it can do even more damage. For instance, if a debt shows up as active instead of discharged, it could hurt your credit. That’s why a bankruptcy lawyer in Springfield, IL suggests obtaining a free credit report and checking it for inaccuracies. If you catch mistakes, you should dispute it as soon as possible. Call Pioletti Pioletti & Nichols today.
3 Major Consequences of Filing for Bankruptcy
Filing for bankruptcy is not something to be taken lightly. At some point, serious debt may become unmanageable, and with the help of a bankruptcy lawyer in Springfield IL, you can file to remove certain types of debt. However, this is a serious financial decision, so make sure you consider all the potential aftereffects and even seek counsel from a firm like Pioletti Pioletti & Nichols.
Loss of Property
You can file for Chapter 7 or Chapter 13 bankruptcy. Both have different levels of debts that you can eliminate and varying degrees of consequences, but regardless of the type of bankruptcy you file for, filing can result in the loss of some of your assets. For example, you may be forced to give up your car or house, which could be liquidated to pay off your lenders. This also extends to personal property, like jewelry or antiques. If you have personal belongings that are important to you, or if you don’t have somewhere to go should your house be taken from you, make sure you consider the risks.
Difficulty Getting Financing
Your credit report is how lenders determine what level of risk you are, and seeing that you have previously filed for bankruptcy labels you as “high risk.” This means that creditors will either offer you high interest rates or may even flat out deny you. A bankruptcy can stay on your report for up to 10 years in some cases. Whether you need a credit card or a mortgage, securing financing can be made extremely difficult for a decade. You can, however, try to get approved for secured credit cards with a cash deposit. A bankruptcy lawyer in Springfield IL from Pioletti Pioletti & Nichols will tell you that having this credit source is an essential step to repairing your credit over time. So long as you use it frequently, pay it off regularly and early, and keep your credit utilization under 30%, you’ll be in good shape.
Bankruptcy doesn’t necessarily get rid of all debt. Some debt, such as student loans, government fines, and court-ordered payments such as alimony or child support cannot be forgiven. Additionally, anyone who has co-signed on debts with you will still be held responsible for their share. Ultimately, this could hurt your personal relationships, so make sure they are aware of your decisions prior to filing. There could also be errors on your credit report if the debt is still considered active. Your best bet is to obtain a credit report and consult a bankruptcy lawyer in Springfield IL to figure out what debts can be forgiven and what to do moving forward.