Bankruptcy Lawyers
South Carolina


S.C. Lawyer Offers Best Ways to Bounce Back After Bankruptcy

bankruptcy attorneysThe aftermath of a bankruptcy feels like a financial catastrophe for many people. Not only can it remain on your credit report for 7-10 years, it can also reduce a person’s likelihood of qualifying for credit or a loan during that time.

Some debtors struggling to make ends meet are reluctant to consider bankruptcy because of the impact it will have on their credit, but it’s important to note that filing for bankruptcy is not a financial endgame. An article in personal finance website, offers some tips on how you can financially bounce back after a bankruptcy.

Make a budget

Making a budget is key to managing your finances, but this can be challenging, especially for those who have never created and maintained a budget before. This can be accomplished by creating a spreadsheet or using an online budgeting platform.

You must first determine what your monthly expenses are – your mortgage, home utility bills, insurance, and other expenses. Ensure that you earn enough to pay these bills and avoid deviating off the path.

You should then calculate your basic needs, like food, gas, and clothing. Then, factor in how much you can spend on entertainment and how much you can save for emergencies.

Start only using cash

Getting into the habit of only using cash or a debit card can prevent you from accumulating future debt on credit cards.

Using cash exclusively can also prevent you from spending excess money on things you don’t need and help you save in the long run.

Even if you re-introduce credit cards in the future, getting accustomed to cash only can help prevent you from making a habit out of racking up debt.

Pay all bills on time

Any debt that you still have after a bankruptcy – whether it be a mortgage or student loans – should be diligently paid on time. On-time payments account for roughly 35 percent of your overall credit score.

In order to ensure that you’re paying your bills on time, you can set up calendar alerts when it’s close to the payment due date.

You can also set up automatic payments by syncing a creditor with your checking account. In case you forget, establishing auto-pay will ensure that a payment is made on the due date.

Add positive accounts to your credit history

Bankruptcy can reduce your chance of qualifying for future credit, but you can increase your likelihood of obtaining credit by adding positive accounts to your credit history.

Even if you don’t currently have any credit cards, lines of credit, or loans that could help boost your credit score through on-time payments, you may still take advantage of your home utility bills.

Experian allows customers to include utility and phone bills in their credit reports, but this service isn’t offered by TransUnion or Equifax. Utility bills may include cable, internet, gas, electric, water, or oil.

Apply for a secured credit card

If your credit score is below 600, you may be eligible for a secured credit card – which can be useful for helping you rebuild credit after bankruptcy. In order to obtain a secured credit card, you must put down cash as collateral. The amount you put down on a card will be your credit limit. For example, if you put down $500, then that’s your limit.

On a secured credit card, you would make monthly payments just as you would on a regular credit card. If you fail to make payments, the lender can simply tap into your cash collateral. Making on-time monthly payments on a secured credit card can help boost up your credit score.

Avoid scams

In most cases, you can rebuild your credit by taking the following steps mentioned above. It’s important to be wary of companies that promise to help you rebuild your credit. Many of these companies require upfront fees and often take advantage of consumers who are desperate to boost their credit scores.

If you’re struggling to make ends meet due to an overwhelming amount of debt, don’t be afraid to consider bankruptcy as an option. An experienced South Carolina bankruptcy attorney at Benjamin R. Matthews and Associates, LLC can guide you through the bankruptcy process and help you get on the path to financial freedom.

Contact us today to set up your free initial consultation.

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2010 Gadsden Street
Columbia, SC 29201

Phone (803) 799-1700
Fax (803) 728-6718

331 E. Main St, Suite 257
Rock Hill, SC 29730

Phone (803) 909-9377
Fax (803) 728-6718