Explained By a Kansas City Bankruptcy Lawyer
Bankruptcy is a scary prospect for some people. However, fears over bankruptcy are largely overblown and often not representative of reality. Many people assume bankruptcy permanently destroys credit scores. Wrong. You do not have “permanent” credit scores. In fact, you can actually begin repairing your credit soon after your bankruptcy. Bankruptcy allows you to discharge debts that were making your financial life difficult in the first place. Below, our Kansas City bankruptcy attorney discusses bankruptcy and credit scores.
Does Bankruptcy Affect My Credit Score?
Yes. However, not filing bankruptcy could also affect your credit score, and for longer, depending on your financial situation. Waiting to resolve your financial problems could make matters worse. You could have poorer credit for a longer period of time if you are unable to pay back your debts.
How Do I Repair Credit After Bankruptcy?
Going forward, it is important to show lenders that you are financially stable. There are a couple of ways to go about doing this.
- Make payments on time. Consider using an auto-draft feature with your bank so it is impossible to forget payments.
- Save money. Life can throw unexpected curveballs, such as job loss or illness, at any moment. Be prepared for future life events by saving money. Should you lose your job or suffer an injury or illness, it will be easier to absorb the blow financially.
- Monitor your credit history. You should monitor your credit for a number of reasons, but especially if you recently filed for bankruptcy. Keep an eye on your credit so you can determine where to focus your efforts on rebuilding your finances.
- Avoid additional debt. Avoid taking on additional consumer debts, such as credit cards or loans. If any debts are left from your bankruptcy, focus on paying those down first. The key here is to achieve financial stability.
- Do not repeat past mistakes. Not everyone files bankruptcy due to irresponsible spending. Some people may file bankruptcy after an illness or job loss. However, if irresponsible spending was a cause of your bankruptcy, then it could help to think about what led to your bankruptcy in the first place so you can avoid repeating the same mistakes.
How Long Does it Take to Repair Credit After Bankruptcy?
It depends on your personal situation. However, you may begin to notice improvement within months or a year after your bankruptcy. Remember, stay consistent with payments and avoid taking on excessive debts. The goal is to show lenders, employers or other parties that you are financially stable.
Also, keep in mind that it could take longer to repair your credit if you hold off on filing for bankruptcy. The longer you wait to address your financial issues, the more damage you could suffer in the long run. Depending on your personal financial situation, it may not be worth the risk.
Contact Our Kansas City Bankruptcy Lawyers for Debt Relief Options
The Kansas City bankruptcy lawyers at Troppito Miller Griffin, LLC can help you review debt relief options. You can schedule a free consultation with us by dialing (816) 320-6527 or by using the case review form on our site.