Life After Bankruptcy

As opposed to widely-held notions about backruptcy, you can and should live well in post-bankruptcy. The post-bankuptcy life can mean the total elimination of debt, coupled with the will to save freely and invest money wisely. Those who are thinking of filing bankruptcy due to credit card debt, or those who have already filed, should look at the bankruptcy as a new beginning and a chance to better manage their finances.

Although your credit is usually shredded in pieces after bankruptcy is filed, especially with Chapter 7, some of the first things an individual begins to receive after receiving the discharge from debt from the court are offers from credit card companies. Because these companies know that someone who is bankrupt would have already used and probably, exploited credit cards, and that they cannot file Chapter 7 again for another eight years, they are considered a "good risk" by predatory lenders who will offer credit cards with low balances and very high interest rates.

Individuals who have recently filed bankruptcy should read the fine print on any credit card offers. If an unsecured credit card is being offered, there is a high likelihood that the card is built-in with very high interest and monthly fees. While many individuals may want to "rebuild" their credit history right away, they should be reminded that the bankruptcy will stay on their credit history for ten years. Although this will damage their credit score, individuals can take steps to repair their credit by getting a secured credit card. A secured credit card is the way to go and it is usually covered by assets or cash in the bank. A secured credit card will generally attract very low interest rates and its fees are also much less than an unsecured one. A bankrupt person should start living within one’s means. Therefore, the post-bankruptcy individuals should apply for a secured credit card that can be used in emergency situations.

Some individuals may be tempted into buying new cars from predatory lenders offering loans at 20 percent interest for new cars. Life after bankruptcy, again, should be about living within one’s means. Even though you may see yourself acquiring a new car in the future, it is better keeping your current car that is already paid for than increasing more debt for yet another car, at very high interest rates. One of the most difficult things to purchase with bad credit is a car. Cars are usually very expensive and can easily be moved. This being the case, many established lenders will reject a car loan based on bad credit. But predatory lenders will certainly not pass up the chance to "help" so easily.

A bankrupt person can buy a house easier than buying a car. These individuals will be able to get a mortgage from some lenders after 2 years. The rate will be higher than for other individuals with good credit, but because a house is deemed necessary to live and real estate is mostly a good investment, purchasing a home with a mortgage and making timely payments on schedule is probably the best way you can rebuild your credit.

Although a bankruptcy stays on one’s credit for 10 years, there is indeed hope after bankruptcy. Individuals should have learnt their lesson on what resulted their debts to inflate up and then simply take the appropriate precautions to avoid repeating the same mistakes. Life after bankruptcy can be good, as long as those individuals who file bankruptcy learn from past mistakes and avoid making them in the future.

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