Pennsylvania bankruptcy exemptionsFiling for bankruptcy has such a negative connotation that many people who would benefit from the process are hesitant, concerned about their reputation and their ability to be financially secure in the future. The truth is that recovering from a bankruptcy filing is possible.

But, to make sure that you don’t get into trouble again, you need to have a plan that begins on the day that you make your decision, and you need to stick to it. Though the record of your bankruptcy will remain on your credit report for 10 years that doesn’t mean that you will never be able to get credit again. The sooner you begin to take positive action, the less of a long-term impact it will have.

One thing to remember is that once you’ve wiped out your debt via bankruptcy, potential creditors will actually see you as a better risk, as you no longer have as many obligations and are more likely to be able to pay off a new loan. They also know that they are at no risk of your new debts being discharged, as you are not able to file for bankruptcy again for eight years. Those two things combined mean that you may be able to begin establishing credit again, but you must do so with forethought and an understanding of how much you can afford.

To do this, you should start by creating a budget that is an accurate reflection of your financial situation. Be honest with yourself about what your income and expenses are, and make sure that you keep your expenses far enough below your income that you are also able to save a bit of money for an emergency fund.

Another step you should take is to take advantage of the many free credit score services and track your credit score every month. That way you will always know whether you are improving or getting yourself into trouble

To establish new credit, seek out either a secured loan or a secured credit card. Both are backed by money that is already on deposit which you cannot access. Though you may end up paying higher interest rates, these are important tools for rebuilding your credit. If you get rejected for these, you may want to find a friend or family member who is willing to co-sign a credit card or loan or who will give you authorized user status. Make sure that these loans will reflect your payment activity so that it can build your credit score.

Recovering from a bankruptcy is not impossible, but it does take careful planning and patience. For information on how we can help, contact our office today to set up an appointment.

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