If you are one of the many Tennessee residents who are struggling financially, your search for a solution has probably brought you here. You know a bit about bankruptcy, and you want to know more, but at the same time, numerous people have told you to avoid it at all costs as it will forever destroy your credit. So, you keep going back and forth as to whether it is something you should really look into.
There is some good news for you. Rebuilding your credit after a bankruptcy filing is possible. It takes time and hard work, but you can do it and come out the other side in a much better place — economically speaking.
What can bankruptcy do for you?
There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Chapter 7 is for those individuals who lack the disposable income to pay their creditors and qualify for immediate debt discharge. Chapter 13 is for those who make too much to be eligible for debt discharge but need an affordable payment schedule put in place. Both offer relief, end creditor harassment and can get you on the path to financial freedom — among other things.
How do you rebuild credit if you ultimately file for bankruptcy?
There are several things you can do. The best thing you can do is make sure you make any payments you have remaining after your bankruptcy filing on time. It doesn’t matter what they are for. On-time payments can slowly increase your credit score. Along with that, you may want to:
- Frequently check your credit report for errors and report any found.
- Look into alternatives to credit cards.
- Turn to loved ones with good credit histories for assistance with obtaining credit.
- Make sound financial decisions moving forward.
Finally, give it time. Bankruptcy filings can stay on your credit report for seven to 10 years. While it may limit your access to some types of credit, it does not stop your ability to raise your credit score by doing the things mentioned above.
Do what you think is best for your situation
At the end of the day, you are the only one who can decide if bankruptcy is the right course of action for you. You cannot make an informed decision, though, without doing your due diligence and learning more about the advantages and disadvantages of pursuing this debt relief option.