Your Life After Bankruptcy

What Happens after You File Chapter 7 Bankruptcy?

If you’re considering filing chapter 7 bankruptcy, you’re probably curious about what your life may be like after the Chapter 7 bankruptcy proceedings end.

Here at Chapter7.Me, our goal is to provide you with relevant information to help you decide if Chapter 7 bankruptcy is the right debt-relief choice for you. Below you will find information about how Chapter 7 bankruptcy may affect you credit. We’ve also included some tips on how to avoid common pitfalls during your life after bankruptcy.

Should you have any additional questions, don’t hesitate to consult with a bankruptcy lawyer who can help you sort through the Chapter 7 bankruptcy laws. All you need to do is fill out our free bankruptcy case evaluation form or call 1 (888) 632-0501, and we’ll connect you with a bankruptcy attorney in your area as soon as possible.

Your Credit After Filing Chapter 7 Bankruptcy

There’s no question that credit is an important asset. Certain purchases require a person to have decent credit.

For example, it would be extremely difficult and require large amounts of hard cash to purchase a house or condo without sufficient credit. A car purchase would also likely require a person to have credit.

Rebuilding Your Credit

After you file Chapter 7 bankruptcy, you may feel like you never want to touch a credit card again. But the reality is that in order to improve your financial future, you’ll probably have to repair your credit.

You can repair your credit by establishing new credit accounts and making on-time payments or payments in full each month.

After a Chapter 7 bankruptcy filing, you have the chance to manage your credit wisely again.

Your personal bankruptcy filing will stay on your credit report for ten years. If you refuse to apply for new credit, all potential lenders will see is your old bankruptcy filing on your credit report. Without new credit, there wouldn’t be any record of your newly stable finances and your credit score would only reflect your Chapter 7 bankruptcy.

In order to improve your credit score and qualify for reasonable interest rates on home and car loans, you’ll probably want to immediately begin rebuilding credit.

Common Post-Bankruptcy Pitfalls

Chapter 7 bankruptcy can provide people with a fresh start; however, a better financial future is not automatically guaranteed. Just like anything else in life, creating a better financial future takes work.

A University of Iowa College of Law study found out some common mistakes people make that prevent them from truly attaining financial freedom. Below we’ve listed some of those post-bankruptcy pitfalls.

If you’re considering filing Chapter 7 bankruptcy, a bankruptcy lawyer could help you set up a budget plan to avoid some of these mistakes:

Poor Financial Planning

The study’s most significant finding was seemingly obvious—people find themselves back into financial problems when their future income doesn’t cover their future expenses. It can be hard to see this fact when you’re in the midst of things and living your day-to-day life. Some people emerge from Chapter 7 bankruptcy expecting that all of their financial problems are resolved because their old debt has been discharged; however, if you spend more than you can afford, you can quickly find yourself right back where you started before you filed bankruptcy.

Falling for Credit Repair Scams

After you receive your Chapter 7 bankruptcy debt discharge, you may be eager to get started on rebuilding your credit. Be careful of companies or people that aren’t looking out for your best interest. The truth is that no one can rebuild his or her credit overnight. Your bankruptcy filing will remain on your credit report for ten years and the way you may compensate for it is by building a positive new credit history. Some quick-fix companies may target you if they find out you just filed bankruptcy—don’t fall for their deceitful practices.

Rebuilding Credit With the Wrong Companies

There is little doubt that people who file personal bankruptcy will pay a higher interest rate on loans than people with high credit scores. It’s how the credit system works. But, since you won’t be carrying high balances on your new credit cards, you likely won’t be paying much interest anyway. What you do have to look out for are predatory creditors that hit you with exorbitant fees, astronomical interest rates and unfair additional charges. If you decide to apply for new credit cards, be sure you research which credit card companies would be best for you.

Weighing Your Chapter 7 Bankruptcy Option

If you’re looking for financial help, you’ll want to talk to a bankruptcy professional who can assess your personal finances. Whether or not you decide to file bankruptcy, a bankruptcy lawyer can help you map out a brighter financial future.

Chapter7.Me is sponsored by a nationwide network of bankruptcy lawyers who are ready to answer your questions about filing bankruptcy—for free and with no obligation.

Connect with a local bankruptcy attorney by completing our Chapter 7 bankruptcy form or by calling 1 (888) 632-0501.