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How to Rebuild Credit After Filing for Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, allows you to liquidate assets to pay your creditors. Unsecured debts like taxes and child support are paid first, followed by secured debts backed by collateral, such as a mortgage. After the proceeds are exhausted, the remaining debts are discharged.   
Bankruptcy significantly impacts your credit score and can long be considered when you apply for credit in the future. However, it doesn’t spell the end of your borrowing capabilities. You might be able to rebuild credit after filing for bankruptcy in some of the following ways. 
Pay Your Bills On Time
As any Chapter 7 bankruptcy lawyer in Fort Lauderdale will tell you, paying your bills on time can be one of the most effective ways to rebuild credit after filing for bankruptcy. You won’t see improvements right away, but credit card and loan repayments made within the payment windows put you in a positive light as a responsible borrower. Future loan providers can see your new payment history and potentially be more likely to lend to you in the future. 
Keep Your Credit Card Balances Low
Rising interest rates might make you revisit your credit use, but knowing that keeping your credit card balance low might contribute to the positive rebuilding process of your credit, you might be more inclined to do it. Most creditors also prefer you to pay off your credit card balance in full and consistently to improve your credit health and score. If you’re worried about being able to make the repayments, take care with your spending. Don’t spend more than you earn, and use your credit card sparingly. 
Take Care of Overdue Bills
You might not think it’s an issue to miss payments on cellphone bills, utilities, and other household expenses, but it is. Not only can providers turn off their services, such as electricity, but they can also send your unpaid bills to bill collectors. As soon as your accounts enter collections, your credit score can be severely impacted. 
After having just relied on your bankruptcy lawyer to declare bankruptcy, your credit score is already not in the best health. Do your best to start afresh by keeping your bills current and preventing them from going to bill collection agencies. 
Start a Savings Account
More than half of Americans don’t have enough savings to cover a $1,000 emergency. If you don’t have funds set aside and face an unexpected bill, such as a car repair or medical bill, you might be at risk of falling behind. Start a savings account and set aside a percentage of your income each week. Should an emergency arise, you might be better positioned to cover the associated costs and avoid impacting your credit score with late payments. 
Many people adopt the 50-30-20 rule when starting their savings accounts. This involves spending up to half of your after-tax income on needs, 20% on savings and debts, and 30% on anything else you want. 
Rebuilding credit after filing for bankruptcy can be a long road, and it might be some time before you look like a responsible borrower in the eyes of creditors. However, you might be able to speed up the process by taking care of overdue bills, being responsible with credit cards, and paying your bills on time. 

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