There are many reasons why people are often hesitant to file for bankruptcy. One that debtors often share is that they fear that they’ll never regain creditworthy status again.
A bankruptcy will indeed remain on your credit report for between seven to ten years once a judge discharges it — but that doesn’t really bar you from repairing your credit. In fact, you may be able to start re-growing your credit score right away.
What can you do to start re-establishing your creditworthiness?
You may want to consider applying for a secured credit card after a judge discharges your bankruptcy. With a secured card, your bank or credit union will usually have you put down a deposit equal to your card’s credit limit as security in case you can’t make the payments. Secured loans work much the same way as credit cards. Lenders, such as credit unions or banks, will generally allow you to set aside funds in an account and borrow against them.
What’s the advantage of these? The credit unions or banks that issue you secured cards or loans generally report payments to all three credit bureaus, which allows you to begin increasing your credit score right away. This will eventually allow you to obtain an unsecured credit card.
If the idea of secured credit cards or loans rubs you the wrong way, then you might want to consider seeing if a loved one will allow you to add yourself as a co-signer on one of these financial instruments that they have. Creditors will also report your timely payment information to credit bureaus if you select this option.
Where can you learn more about the implications associated with filing bankruptcy?
There’s a lot of anecdotal information widely available about the impact filing bankruptcy in Illinois may have on your ability to regain creditworthiness. You may want to discuss your concerns with an attorney in Palatine who has experience guiding other consumers like yourself through the bankruptcy process. They can address the misconceptions you may have about this legal process and help you decide if bankruptcy is right for your situation.