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How to Rebuild Your Credit After Bankruptcy

November 30th, 2016 | By

Once you have your bankruptcy discharge papers in hand, you may be at a loss as to what to do next. You want to move forward in a good direction, and take charge of your financial life again, but how can you do that with a bankruptcy on your record? Contrary to many bankruptcy myths out there, you may be able to rebuild your credit faster than you may think, and repair your credit scores with just a few intentional steps. Your bankruptcy filing in Atlanta has given you a great opportunity to start over, so here are a few tips for strengthening your credit again.

  1. Make payment arrangements for non-dischargeable debts

While your bankruptcy was processing, you were likely given a grace or forbearance period on your non-dischargeable debts, but once your filing is complete, you are responsible for handling these bills. Make arrangements to pay these debts, otherwise you may face penalties or negative items on your credit report.

  1. Don’t rack up new debt

Some people are misguided to believe that the more new loans or credit accounts they open, the faster they can rebuild their credit, but this is simply not the case. Debt is not your friend. Avoid opening new credit accounts whenever possible, and shy away from scams claiming to help you “repair your credit” with new loans.

  1. Pay your student loans

Unfortunately, student loans are not eligible for discharge under a bankruptcy filing, so make sure you stay up to date on these debts. Speak with your loan provider about options for monthly payments that are reasonable for you, including income-based repayment plans, and see if you qualify for any loan forgiveness programs.

  1. Stay up to date on your taxes

If you have non-dischargeable tax debt, get in touch with the IRS or other tax agency to make arrangements for these to get paid. Even if you do not owe large tax debts, continue to file your taxes as usual, and be sure to account for all of your assets and income, lest face an audit.

  1. Keep your income-to-debt ratio low

One of the main factors in determining your credit is something known as the income-to-debt ratio, which will likely improve upon your bankruptcy discharge. Having a good relationship between your earnings and your debts is crucial in moving forward with financial health.

Need help rebuilding your credit after your Atlanta bankruptcy? Reach out to us today.

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