You might be wondering what will happen after you file bankruptcy. There are options to rebuild your credit, even though you can't open new credit cards right away. Whether you're looking for a new credit card, or looking to save your home, you can rebuild your credit after bankruptcy.
Rebuilding your credit score after bankruptcy
Your credit score will dramatically increase after filing for bankruptcy if you follow the right steps. You must start by paying your monthly bills on time. This is very important since your payment history makes up 35 percent of your FICO score. Your score will also increase if you have positive financial habits. It is best to not charge all of your expenses on your credit card. Instead, you should choose one bill to be able to pay each month in full. Once you're comfortable, you can open new credit accounts.
FICO scores can be affected by credit card debt. A high balance on your credit cards should be reduced. To avoid any future debt, it is a good idea to open an emergency savings fund.
After bankruptcy, getting a new credit card
You must ensure that your bankruptcy debt is cleared before you apply for a credit card. Your credit score can be negatively affected by bankruptcy. It will take between six months and five years to get your debt forgiven. Chapter 7 bankruptcy and chapter 13 bankruptcy can be filed, which will eliminate most of your debt. Chapter 13 is also called a wage earner plan, and it requires you to make monthly payments based on your income.
After paying off all your debts you can rebuild your credit score. This is important if you are ever going to be able to get a mortgage loan or car loan. Credit card options are also limited by bankruptcy. You should carefully review the terms and conditions of each credit card to avoid any negative effects on your credit score.
Saving your home after bankruptcy
Refinancing your home after bankruptcy can be a great way to save it. However, you should be aware of the different options and risks before you make the big decision. First, it's likely that you will have difficulty getting a mortgage after bankruptcy. You must also be ready to spend a lot on home maintenance such as landscaping, pest control and snow removal. While this can be costly, it's important to plan in advance.
In addition, if you are facing foreclosure, you should file for Chapter 13 bankruptcy. You can file for Chapter 13 to stop collection activities against you and work out a payment plan.