Life after Chapter 13 Bankruptcy

The process of filing Chapter 13 bankruptcy and chapter 13 debt consolidation under chapter 13 bankruptcy law should not be completed without the help of a chapter 13 lawyer to avoid chapter 13 dismissal with the bankruptcy court. Any individual chapter 13 debtor, who owns an unincorporated business or who is self-employed, can file for Chapter 13 bankruptcy as long as their unsecured debts are less than $336,900 and their secured debts are less than $1,010,650. A lawyer can also help his or her client with the after effects of filing for Chapter 13 bankruptcy, which includes restoring the credit score and getting life back to normal.

Having Chapter 13 on your Record

Bankruptcy records stay on a person’s credit history for up to ten years from the discharge of debts date. Every single account that was affected by the bankruptcy filing is listed on the person’s credit history as well. An individual filing chapter 13 will have their credit score affected, however, not filing means not paying off debt, so the alternative can be worse. Chapter 13, unlike chapter 7, is a restructuring/repayment plan and can actually help build a credit score in the long run.

Avoiding Financial Trouble after Bankruptcy

One way to restore an individual’s credit history following a bankruptcy is to eliminate the problem that caused bankruptcy in the first place. The problem could be the fact that the individual is a compulsive spender. This means that they purchase items they do not need, items that cost more than they can afford, and spending money when there is no money available to spend. Another problem could have been not paying off credit card bills when they were due. This accrues interest over a period of time, which causes people to go into debt. If these problems can be brought into the open and solved then the individual will be able to restore their credit history over a lengthy period of time. Another way to restore credit history is to always double check credit reports for any mistakes listed on the report. In addition, applying for a secured credit card can help to restore credit history. The secured credit card reports directly to the credit bureaus in the United States. Pay the bills off immediately and the credit history will begin to improve.

Getting Back on Track

Avoiding financial trouble following a bankruptcy case is crucial to any individual that has had their debts discharged recently. Since a bankruptcy case will appear on a credit report for ten years, the debtor needs to avoid any financial problems he or she might encounter along the way. Pay off credit card bills and other bills in a timely manner; do not let them sit around and accrue interest. The debtor should change his or her spending habits immediately after declaring chapter 13 bankruptcy. This means that the debtor should not purchase items they do not need or cannot afford, they should not spend compulsively, and they should not spend money when there is no money available to spend.

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