Morris County Bankruptcy Attorneys Offer Tips for Maintaining Good Credit
You have discharged debts through Chapter 7 bankruptcy and you are ready to enjoy life without as many financial anchors weighing you down. However, the journey is not over. Much like staying in shape, you cannot immediately give up exercise and nutrition once you obtain an ideal figure. To keep it, you need to maintain a healthy lifestyle. Here, our Morris County bankruptcy attorney explains ways you can keep you a positive line of credit after you file for Chapter 7 bankruptcy.
Maintaining Good Credit After a Chapter 7 Bankruptcy
Bankruptcy offers a fresh start on your finances as long as you proceed carefully in the period following a bankruptcy. If your bankruptcy resulted in a discharge of debt, you will not be eligible for similar discharges in subsequent bankruptcies. You must wait eight years before you can get another Chapter 7 discharge. To maintain a solid line of credit, consider the following:
- Review your past statements. How did your debts and spending grow out of control? Address these problems when coming up with a plan for staying within your budget. The credit counseling classes taken during bankruptcy should help you plan for the future.
- Create savings goals. After examining your situation, create a sustainable monthly budget. Figure out which expenses are the biggest priorities, and make sure you pay those first. There are great online programs and budgeting apps for Smartphones that can make monthly budgets easy and efficient!
- Consider your next credit card carefully. It is fairly common for recent bankruptcy filers to receive a flurry of credit card offers in the mail. However, since bankruptcy can have negative, short-term effects on your credit immediately after you file, most offers will come with high interest rates and fees.
What Kind of Credit Card Should I Get After Filing a Chapter 7 Bankruptcy?
You can choose a secured or unsecured card. A secured card is usually the better option for a person who recently filed a bankruptcy and needs to rebuild credit. When you get a secured card, you tie it to a savings account like a debit card. When you put money into the account, you can use it on the card. If the account is empty, you cannot use the card. This is different from an unsecured card, which essentially lets you borrow money on the assumption that you will be paying it back later. Secured cards offer a better opportunity for you to rebuild your credit, and unsecured cards create a bigger risk for falling back into debt.