Filing for bankruptcy can cause a person's credit score to take a hit, but those negative effects aren't permanent. As we have been discussing this week in previous posts, it is possible to start rebuilding your credit right after your bankruptcy discharge takes place.
If you are someone who has gone through bankruptcy, you are probably relieved to have the opportunity for a fresh start. However, you might also be scared or confused about how to start building your credit or why things got out of control last time around.
That's where credit counseling and restoration come in. Just like you depended on an experienced bankruptcy attorney to assist you through the bankruptcy process, a knowledgeable lawyer can also help you set off on the right track financially after your bankruptcy discharge.
Bankruptcy lawyers know that life goes on after bankruptcy and it starts with credit counseling and rebuilding. Credit counseling can help individuals prevent recurring financial problems, and federal law actually requires people who file for Chapter 7 or Chapter 13 to go through credit counseling before and after their bankruptcy filing.
If you are worried about how filing for bankruptcy has affected your credit report or have had financial struggles for a long time, you might be reluctant to even look at your credit report. However, part of credit counseling should also include examining your credit report and understanding what is reported. This will allow you to protect or even enhance your credit report in the future.
Your bankruptcy attorney can also provide you with helpful advice on rebuilding your credit. As we discussed in our last post, one of the best ways to do this is by starting off with a secured credit card that allows you to gradually build up a good payment history using your post-bankruptcy income as "security" for the credit.
For more information about credit counseling and rebuilding, please visit our Life After Bankruptcy page.