Bankruptcy is the process you have to go through to begin again. The first and important item is to rebuild you credit rating. It is necessary to know how long your bankruptcy will appear on your credit report. The bankruptcy will be on your credit report for about 10 years. Although this sounds bad, it only takes about eighteen months of on time payments to your creditors to re-establish your credit. Just remember, it is possible to get good credit ratings after a bankruptcy.
To help your credit ratings you need to get a job, full time or part-time, it doesn’t matter. Another way to help your credit ratings is to get various copies of your credit report. Go over them in great detail to make sure that they are correct. You need to get rid of most of your credit cards. It is advisable to have only one or two. If you don’t have a credit card, try to get one from a local bank or store. If you can’t get a regular card, try to get a secured card.
Now you are on your way to re-establishing your credit, consider these ideas to help you stay on top. Keep open communication with your creditors. If they are advised of your current status they may have helpful ideas about repaying your debt to them. Making a budget will help you effectively pay back debts. Another good idea is to pay off your debts that have the highest interest rates first. Re-establishing your credit rating is hard work but can be done.
Most folks believe that after bankruptcy obtaining a mortgage for a new home is impossible. This is not necessarily the case as there are many lenders willing to take a chance on people once the bankruptcy has been discharged. However, there are few steps that need to be taken to improve the chances of a lender reacting favorably to the applicant’s credit history.
If the person filing for bankruptcy has rewritten any loans such as an auto loan to keep the vehicle out of bankruptcy, keeping up the payments on time will demonstrate an improvement on the potential borrower’s part about wanting to pay their bills on time. Additionally, if any credit cards have been opened since bankruptcy discharge, making sure they are kept up to date will also help the cause.
One of the main criteria lenders look at for home loans is the borrower’s debt to income ratio. Having recently filed for bankruptcy the debt should be minimal. Going through the credit report will show any debts that should no longer be listed. The process of having them removed begins with a written request to the agencies to do so. This process can be time consuming and often proof will have to be provided as to the validity of removing any items from the report.
Even with an appropriate income to debt ratio and a positive approach to keeping payments up to date may not be enough for some lenders to issue a mortgage loan. By waiting a year or six months following an initial rejection may vastly improve the chances of success.
Call us today and speak directly with an attorney for a free, no obligation, consultation to see if you qualify for bankruptcy and if it is the right decision for you and your family.
Wessler Law Firm is a small family owned law firm specializing in bankruptcy law since 1982.
Disclaimer: This article is meant for reference only, and is not intended to be legal advice.
For legal counsel regarding your situation, please consult an attorney licensed in your state.