Once you are filed under bankruptcy, it becomes nearly impossible for you to get credits, loans, or mortgages. However, if you act properly and see this as a fresh start, you can work your way towards improving your credit worthiness and restoring your integrity in society. Here are few suggestions that can definitely help you get on board and start running.
Individual Voluntary Agreement
By signing an Individual Voluntary Agreement with a bank you can inflate a bubble of security around you that would fend off your creditors for an agreed period of time. Moreover, it instills a sense of responsibility on debtors as the bank acts as an insolvency practitioner, and they can always be on the watch to ensure that you fulfill your commitments.
Settling Your Account
You get discharged from your bankruptcy after a year, under normal conditions. Once you are discharged you can resume some operations like applying for loans and credits. But what you need to do immediately after getting discharged is reach for your credit file and investigate it.
The file must show the status of “Discharged”. You should ensure that the credit accounts you compensated for before filing for bankruptcy are shown as “Settled”. The accounts or debts that are included in bankruptcy waiver, does not show any current balance. If you are unsatisfied with any of these things, contact the credit agencies and settle them. This serves as a kick start for a new beginning.
If possible, add a “notice of correction” on your credit file, which could account for why you failed to repay your debts initially. This can give you some sort of leverage the next time you are sitting with a lender.
Now you are ready to begin. Pay your bills on time. This will demonstrate your ability that you are on the pledge to recover and rebuild.
Once you are in the groove, take another baby step towards establishing your credentials by applying for a new mobile phone contract. Not only apply, but make sure you pay your dues as well. Go a step further and apply for a secured credit card.
“This is coming along nicely.”
With secured credit card payments, up and running, go for a high interest credit card with low limits. The trick to using them is to use it sporadically throughout the month and then pay your credits by the end of that month, making you ineligible towards payment of any interest.
It’s All About Developing a Long Credit History
Developing a long credit history and recovering your credit worthiness after bankruptcy goes hand in hand. Apply for a loan or a line of credit. A car loan or a provident are some of the suggestions. It will help improve your credit file while also be payable without much hassle.
What You Should Not Do!
Do not go off freezing your lines of credit and credit cards, as these steps will only reduce the availability of credit to you. And always avoid credit repair services.
The decision to file bankruptcy did not dawn upon you in a matter of days or weeks. So remember, even the road to recovery is not easy and it will take plenty of effort and time. However, it’s not impossible!