One of the major challenges consumers will have to overcome after bankruptcy is dealing with rebuilding credit. Many consumers are concerned that once they have filed bankruptcy, especially Chapter 7 they will have to wait up to 10 years to reestablish their credit. Fortunately, this is not always the case.
Considering buying a home?
If you have been through a bankruptcy you may think the home lending process is working against you. Home loans are not out of reach if you have been able to save money for a downpayment and you have been making your rent payments on time. FHA offers programs that allow borrowers who have not had a home foreclosed on to buy a home and get an FHA-insured loan in as little as two years after a Chapter 7 bankruptcy. In some cases, it may be possible to obtain a mortgage in as little as a year.
Troy, Ohio Bankruptcy Attorney explains what to do following a Chapter 7
One of the biggest mistakes debtors make is not protecting themselves from erroneous credit reporting after a bankruptcy. Any accounts that were eliminated in a Chapter 7 will still show up on your credit report, but they should be showing up with the code “BK” to show they were included as part of the bankruptcy process. Consumers should request their free credit reports within a few months of the bankruptcy process being complete to ensure all information is recorded properly. If not, they should file a dispute with the individual credit reporting agency. If an agency fails to correct erroneous information on a credit report, you should contact your attorney for assistance.
Don’t ignore credit cards
Consumers who are in the process of rebuilding their credit history may consider a secured credit card. Basically these work just like any other credit card except they have a savings account attached to them. You can rebuild your credit using these cards however, if you fail to make payments on time, you will get a negative mark on your credit report.
Consumers who decide to file for bankruptcy do not make that decision lightly. If you are considering filing for bankruptcy and you are uncertain about how to build your credit afterwards, feel free to contact the Chris Wesner Law Office, LLC and we’ll be happy to explain both the bankruptcy and “starting over” process to you.