Life After Bankruptcy

The decision to file bankruptcy is difficult under any circumstance. A common fear is the uncertainty of what the future holds. What we hear most often from people talking to us for the first time about filing bankruptcy is, "what is the likelihood of rebuilding my credit quickly?"  With over 40 years of experience, we have the tools and strategies to help rebuild a positive credit history and restart your life after bankruptcy.

Why People Delay Filing Bankruptcy

Occasionally people avoid or delay filing bankruptcy because they fear what it will do to their credit rating and credit report. In some cases, however, not filing for bankruptcy protection can have negative effects that can go well beyond any credit bureau rating impact.

Bankruptcy Protection Provides A Fresh Financial Start

Bankruptcy laws serve to provide people a fresh start by allowing for the elimination of burdensome debt under Chapter 7 bankruptcy protection and affordable reorganization in some cases under Chapter 13 bankruptcy protection. A bankruptcy attorney can help determine which of these bankruptcy filings would be most suitable in your particular case.

Credit  After Bankruptcy

A Chapter 7 bankruptcy or a Chapter 13 bankruptcy will impact your credit but it is not permanent. In many respects your credit profile may be improved by bankruptcy protection. Bankruptcy filing changes your debt to income ratio to something lenders may find more appealing. When applying for a loan or line of credit the applicant's debt-to-income ratio is a key factor in deciding whether the application is accepted or not.

It is important to know that while in some cases a person's likelihood of being approved for a loan or credit card may actually be improved after filing for bankruptcy, the filing will be on the credit report for up to 10 years. Many people think that they will not be approved for a line of credit until the bankruptcy is completely off their record but this is usually not the case. Many people do obtain credit cards not long after filing for bankruptcy. You may start receiving credit card offers in the mail soon after your bankruptcy is discharged.

When you receive your new cards one of the first things that you'll notice is that your line of credit may be low.  This is normal and you will find that after you have displayed a good repayment history, the credit card issuing bank will slowly begin to increase your credit limit.  In addition, the annual percentage rate (APR) for the credit card may be higher as well.  A higher APR is not a penalty as much as it is a way to for you to more carefully monitor your spending habits.  The APR is essentially the price you are paying for the money your are borrowing.  A higher APR will prevent you from "borrowing" more then you should.

After your bankruptcy has been discharged and things begin to take shape again you will find that there is absolutely life after bankruptcy and the outlook for your credit is not as grim as the banks may have you believe!

Confidential Consultation With A Long Island Bankruptcy Attorney

Contact us on line or call the  Bankruptcy Center of Long Island today at (631) 564-2754 to arrange for a free and confidential bankruptcy consultation. Learn more about life after bankruptcy.