• 15
  • August
    2011

As our readers are surely aware, financial recovery is the probably the largest concern for individuals in the midst of bankruptcy and those considering filing for bankruptcy.

In our last post, we left off discussing tips for recovering from bankruptcy. In addition to the suggestions we made in our last post, there are several others worth mentioning.

Find a new credit card company. Because of increasing default rates and interest rates, credit card companies have developed stricter standards over the last couple years. That said, most individuals who emerge from bankruptcy will be able to find a lender willing to issue a credit card, car loan or some other form of credit. Our readers should be aware, though, that the terms of such credit will not necessarily be wonderful to start with, so it is important to be very deliberate about using credit carefully.

It is helpful to do a fair amount research into various credit card companies before making a decision about one. Often, secured credits cards are the best option for individuals who are coming out of bankruptcy.

Take care to avoid unfair deals. Not all credit companies are honest. Folks coming out of bankruptcy should be aware that some companies have no problem taking advantage of their difficulty in getting good credit. Recent filers should be wary of credit card companies offering payday loan, rent-to-own deals with high interest rates, as well as hidden fees and other costs.

Seek support where necessary and be hopeful. These last two suggestion, though not financial in nature, are nevertheless important. Finding social support for rebuilding your financial life can be very helpful for breaking the feeling of isolation and alienation some filers experience. Meeting with a professional credit counselor can help with this as well.

Also, know that, in time, making a full recovery from bankruptcy is indeed possible. Your credit score will eventually improve and you will be able to qualify for good credit card offers. Many individuals who file for bankruptcy actually notice an improvement in their credit shortly after, as their debts clear. And while the bankruptcy will stay on your record for 10 years, there are usually creditors out there who are willing to lend to recent filers.

Source: U.S. News and World Report, "How to Recover from Bankruptcy," Kimberly Palmer, August 9, 2011.