Even though filing for bankruptcy can help you discharge a large portion of your debt, it typically hurts your credit score. Even after you are able to obtain a new credit card, you will likely be paying higher interest rates. Luckily, there are some simple steps you can take immediately following bankruptcy to start rebuilding your credit:
Create a Budget
The best way to avoid falling back into your pre-bankruptcy spending habits is to document your monthly expenses. Once you have a list of how you spend your money, you can compare these expenses to your monthly income. The actual process of writing down where your money is going can help you prioritize expenses like rent, utilities, and food. From there, you will know how much money you have left to spend on luxuries and entertainment.
Obtain a Secured Credit Card
It will likely be difficult to take out a new credit card following your bankruptcy petition, but you may be able to obtain a secured card. Secured credit cards are linked to your bank account and have lower spending limits. Keeping up with payments on your secured credit card for six months to a year following bankruptcy will help you qualify for traditional credit cards once again.
Check Your Credit Report
Once you start taking control of your spending habits and finances, you need to keep checking your credit report for any errors. Checking your report also helps you understand what future lenders are seeing when they examine your case.
Since 1990, Cutler & Associates has helped Chicago residents navigate the bankruptcy process. By calling now, we can help stop collection calls, UCC 1 filings, and wage garnishments. You can reach an Aurora or Schaumburg bankruptcy attorney by contacting us through our website or by calling us at (847) 868-2265.
While a college acceptance letter represents the culmination of hard work, perseverance, and academic success, it also represents a looming financial burden. For many young students across the country, the only way to finance an investment in higher education is by taking out large student loans. In fact, student loan debt in America now exceeds credit card debt.
College students typically begin taking out loans at the age of 18. As this report explains, student loan obligations can affect job prospects and family planning decisions. Yet, economists still suggest that these loans are a worthwhile investment, as college graduates earn approximately 65% more than high school graduates in their lifetimes.
Cutler & Associates has almost 25 years of consumer bankruptcy experience. Call us at (847) 868-2265 to schedule an appointment to learn about your financial options in the Aurora and Schaumburg areas.
For a number of couples, money issues are a cause for divorce. If a couple is going to file for bankruptcy and divorce, which is better to file first? This decision will depend on a variety of factors, including the type of bankruptcy petition and the couple’s combined debt.
The fees for filing a bankruptcy petition are the same whether it’s an individual or joint filing. This means that petitioners could potentially save by filing jointly before a divorce. The best way for a couple to decide if this is their best option is to have a bankruptcy attorney go over their case. If a couple chooses the joint filing option, they need to tell their bankruptcy attorney ahead of time that they will be divorcing in the future. This warning can help an attorney identify potential conflicts of interests in the case.
When many people think of the bankruptcy process, they mistakenly assume it is for the financially irresponsible. In reality, millions of people across the country file bankruptcy petitions each year because they suffer unexpected life changes such as illness, divorce, or job loss. For people who experience one of these major changes, there may be no other financial remedy but to file a bankruptcy petition.
MYTH: Bankruptcy Discharges All Debts
Even though filing for bankruptcy can help a petitioner discharge many unsecured debts, not all debts can be forgiven. For example, alimony, child support, and student loan payments all remain following a bankruptcy petition. However, some petitioners can have student loan debts discharged if they can prove hardship, like permanent disability.
MYTH: Bankruptcy Ruins Your Credit
While a bankruptcy petitioner will find that his credit score takes a hit, he can quickly begin to rebuild credit. Within about one month of debt discharge, a petitioner will likely start to receive offers for secured credit cards (low limit cards requiring a bank deposit). Staying current on secured card payments can help a petitioner begin to rebuild credit. After using a secured card for six to 12 months, a petitioner can often switch to a regular credit card.
MYTH: Bankruptcy Is an Easy Solution
Neither Chapter 7 nor Chapter 13 bankruptcy is an easy solution to financial problems. In a Chapter 7 bankruptcy, a petitioner may have to forfeit secured property like his house or car. In a Chapter 13 petition, a petitioner can keep his property, but still needs to make debt payments. Nevertheless, bankruptcy is sometimes still the best solution for a person who is unable to pay his remaining debts and is in need of a fresh financial start.
For more information about whether bankruptcy is right for you, contact Cutler & Associates at (847) 868-2265. Since 1990, our bankruptcy attorneys have provided quality legal services to the Chicago area. We have seven convenient office locations, including Aurora and Schaumburg.