Filing for bankruptcy can be an important step for people caught in severe financial circumstances due to any number of factors such as job loss or costly medical bills. Most bankruptcy cases are caused by financial hardship – not irresponsible spending habits – which disproportionately affect low-income individuals and neighborhoods.
How to rebuild your credit after a bankruptcy in the Bronx
In fact, the Bronx has one of the highest rates of bankruptcy in the United States. Although you may need to file bankruptcy due to financial hardships, such as unexpected medical debt or the sudden loss of your job, your credit score will still be negatively affected. Here are some steps you can take to rebuild your credit after declaring bankruptcy in the Bronx.
- Apply for a secured credit card – After filing for bankruptcy, one of the biggest hurdles people face on their way to financial independence is establishing a new line of credit. Even when your financial burden is not the result of reckless spending, credit card companies may be reluctant to provide you with more credit.
- Apply for a secured loan – Similar to a secured credit card, a secured loan is a loan backed by collateral, such as your home or car, that can be used as a payment if you fail to pay back your debt. Secured loans are easier to qualify for than unsecured loans; however, they typically have a shorter window to pay back and missing even one payment can result in repossession of the financial assets you used as collateral.
- Monitor your credit report – It is always a good idea to keep an eye on your credit report, but for individuals who have filed for bankruptcy it is even more important. Creditors may continue to report negative account balances even after your bankruptcy discharges, so it is important to make sure your credit report is accurate. To do this you may request a credit report every few months to make sure your credit report shows a $0 balance for any debts that have been discharged through bankruptcy.
- Pay on time – Paying your credit card on time each month is one of the best ways to improve your credit score. Furthermore, it is better to pay your balance in full each month so you can avoid getting into debt trouble again.
You may consider applying for a secured credit card, which requires you to provide a cash security deposit in case you fail to pay your bill on time. As the deposit protects the issuer from losing money, secured cards are easier to qualify for, even if you have little or no credit. You will get your deposit back when you are upgraded to a regular credit card.
Consult an experienced bankruptcy attorney
If you need help while you try to move past your bankruptcy, call Thomas M. Denaro, Esq. today. For more than 30 years, the law offices of Thomas M. Denaro, Esq has been dedicated to helping individuals, couples, and small businesses in the Bronx who are struggling with financial difficulties. Call us at (718) 863-6000 or contact us online to schedule a free and confidential consultation with our Bronx bankruptcy attorney.