Many people file for bankruptcy protection as a responsible means of getting their financial lives back on track. In New Jersey and across the United States, over 1.1 businesses and individuals filed for personal bankruptcy in 2013. The good news is that filing for protection is often successful. By making some proactive steps, bouncing back after filing may be faster than expected.
Initially, a bankruptcy typically lowers a filer’s credit score. How far the score drops is dependent upon what the person’s credit rating was initially. The higher the score, the higher it is after filing.
One of the first steps after bankruptcy is for the filer to begin rebuilding his or her credit score, and a good place to start is by obtaining a copy of their credit report. After checking for errors, the consumer can then work to get the score up a little higher each month. It is reportedly possible for a person to raise his or her score by 50-75 points over a one to two year period by paying bills on time and getting a small secured credit card and then paying off the entire balance each month.
Understandably, after filing for personal bankruptcy, a New Jersey resident may be hesitant to get another credit card, but this can help re-establish credit more quickly. It’s best to be patient and focus on improving the credit score over time. If a person is feeling the strain of debt and needs help, the sooner he or she takes positive step forward after filing, the sooner they can bounce back onto a healthy financial track.
Source: The Huffington Post, “How to Rebuild Your Credit After Bankruptcy — Fast“, Curtis Arnold, Oct. 15, 2014