If you’re planning on declaring bankruptcy, you should also be planning for life after bankruptcy. Bankruptcy is a double-edged sword; you should take care to make sure that the weapon that cuts into your creditors’ pocketbook doesn’t cut into your own.
In the first couple of years following bankruptcy, you’ll have a poor credit score. As a result, finding available credit will be difficult and interest rates will likely be higher. With a little work, however, you can build back your financial life surprisingly quickly.
What will cost more in the years after bankruptcy? In addition to higher interest rates, you may find that some apartment complexes may deny you a unit. For many insurers, such as car insurance providers, your rates may go up, too. Finally, you probably won’t be able to make big purchases – like a car or home – on credit either.
How can you make it work? For the first twenty-four months, you’ll probably have to be disciplined. All cash transactions may be the rule around your house. However, if you make conscious choices that reflect financial prudence, it’ll get better in a hurry. Making timely payments, keeping your overall debt level low, and holding on to a few legacy credit accounts will gradually improve your prospects for cheap credit in the future.
Have questions about your particular situation? The attorneys at the Dallas law firm of Fears Nachawati have years of experience helping debtors just like you. We know what it takes to lay out a game plan that moves you through the bankruptcy process – and to a life of greater financial certainty. Talk to our professionals today.
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