Life after Chapter 7: Stop Wasting Money

Restoring credit, avoiding future financial trouble, and restoring a debtor’s reputation can take months, sometimes even years, before the records are washed clean. Chapter 7 bankruptcy can be filed by any individual, company, partnership or sole proprietorship in the United States as long as the debtor has not missed a court appearance regarding a prior bankruptcy filing within the previous 180 days. Other eligible parties include debtors that have attended credit-counseling courses offered by an approved credit-counseling company 180 days prior to filing for bankruptcy.

Restoring Credit after Chapter 7

Restoring credit can be the most difficult item to repair for a debtor after the Chapter 7 bankruptcy process. When a debtor files for Chapter 7 bankruptcy their credit score and credit history takes a huge hit. Having ch 7 bankruptcy mentioned on a credit report lowers a person’s credit score, which means that their credit history is unimpressive to creditors and other loan agents. A person with a poor credit history or a damaged one will have trouble obtaining a new loan or a mortgage from a lending agency for a couple of years after filing for bankruptcy. It might take anywhere from six months to two years for a debtor to restore his or her credit history to the point of being acceptable for loans and mortgages.

Avoid Poor Financial Decisions

An important tip for restoring credit following a bankruptcy is to address the issue that caused the debtor to have credit troubles in the first place. If the debtor eliminates this item from everyday life and financial problems should occur infrequently. This means that bills should be paid within the month that they are due to the creditor companies. Don’t wait to pay off the debt or the credit card bill so that the interest rates will kick in and the debtor will acquire more debt that they will have to pay off over a period of time. Also, change spending habits as much as possible to avoid financial problems. Spending habits such as compulsive buying, purchasing items that are unaffordable, and spending money on unnecessary items while in debt are financial problems.

How Long will Bankruptcy be on My Record?

Common chapter 7 questions often include how soon the record of it is removed. Bankruptcy can be eliminated from a person’s records or credit reports ten years from the date of discharge of the debtor’s debts. The discharge of debt is defined as the removal of debt from a person’s records or from their responsibility. Filing for chapter 7 bankruptcy cannot be removed from a person’s financial records prior to ten years from the date of the discharge of the debt under any circumstances.