Rebuilding Credit/Life After Bankruptcy

Life After Bankruptcy & Rebuilding Credit

Filing for personal bankruptcy can be an important first step towards giving yourself the fresh start you deserve. It is not the only step, however, and in order to preserve your newfound financial stability, you must take care to rebuild your credit and avoid common pitfalls. For nearly 20 years, Azadegan Law Group, APC have helped people in Los Angeles County through the California bankruptcy process and beyond, developing strategies that relieve the burden of debt and allow individuals to take advantage of the protections offered under bankruptcy law.

Taking Steps To Rebuild Your Credit

If you have successfully completed a bankruptcy filing in Chapter 7, you will be granted a formal order known as a discharge. This is a major step towards a second chance at a healthy financial future. You can immediately begin to rebuild your credit by taking advantage of the opportunities at your disposal. After four months have passed from your discharge, you should acquire a copy of your credit report. There are three major credit bureaus: Equifax, Experian and TransUnion. You are entitled to a free credit report each year that will inform you where you stand with these companies, and they can be acquired by going to https://www.annualcreditreport.com/ or calling (877) 322-8228. While many other websites will claim to offer a free credit report, they often require a fee or a monitoring service.

A major part of restoring your credit after the completion of a Chapter 7 or Chapter 13 bankruptcy is to keep a watchful eye on your credit report. Credit reports often contain inaccuracies that go unnoticed by both the credit bureau and the consumer. Make sure your bankruptcy case is marked as “discharged” and that all accounts say “discharged in bankruptcy.” All accounts that have been reaffirmed should be noted as “account in good standing.” Make sure that all information about your past creditors and addresses is accurate.

Restoring Your Credit With Credit Cards

Many people are understandably hesitant about credit cards after filing for bankruptcy. Either they do not think they will be approved for a credit card or they got into financial trouble in the first place by overextending credit. The truth is that you will likely be given many credit card applications after discharging your debt in bankruptcy and you must be careful when considering these offers. Contrary to commonly held bankruptcy myths, responsible use of a credit card can be a great tool for rebuilding your credit score and our attorneys will work with you to ensure that you take the right steps.

A great way to positively affect your credit score is to make small charges each month on a credit card that you pay in full. While late bill payments negatively affect your credit score, simply paying your utilities and other monthly bills on time improves it. Setting up automatic bill payments or direct deposit from your checking account can help ensure that you stay current with your bills, though you must carefully monitor your records and bank statements.

Talk To An Experienced Attorney About Life After Bankruptcy

In many ways, once you have completed a filing for Chapter 7 or Chapter 13 bankruptcy or had a judgment rendered, the worst is over. It is important that you are informed and careful going forward, so as to avoid the mistakes and traps that could get you in trouble again. Azadegan Law Group, APC is dedicated to helping clients in California file for personal bankruptcy and rebuild their lives afterwards, empowering people to take steps towards a better financial future.

  • Michael H. Raichelson Photo
    Michael H. Raichelson

    Business Litigation & Bankruptcy Attorney

    Michael H. Raichelson has over 25 years of business, real estate and bankruptcy litigation experience, helping businesses and individuals throughout the United States and Internationally. In addition, while acting as General Counsel for a national litigation firm for several years, he supervised the legal department while personally participating in hundreds of litigated matters. Mr. Raichelson was born in Washington D.C. and was raised and educated in California. He grew up in the Los Angeles ...