Chapter 7 bankruptcy offers someone an opportunity to start over without a crushing debt burden. Many people become financially secure after a bankruptcy. Unfortunately, not all people do so. It’s not an overnight process to repair a damaged credit rating and learn better money management skills, but an experienced Bankruptcy Attorney St. Charles MO will say that it’s well worth doing.
The Credit Card Trap
Credit card companies send out many “pre-approved” card offers to people who have just gone through a bankruptcy. Why? Anyone who consulted a Bankruptcy Attorney St. Charles MO and just had their debts discharged in a Chapter 7 bankruptcy cannot go bankrupt again for eight years. Capital One, Providian, First USA and Orchard Bank are some of the companies who will be filling the mailbox with offers for new cards. These cards will come with high fees and interest rates, even those that offer 0% interest for a limited time. Don’t accept any of these cards.
How to Improve a Bad Credit Rating
• The credit cards mentioned above will do little to repair anyone’s credit rating, even though they do report to the credit bureaus.
• In order to begin to get a higher credit rating, pay any secured debts (home or car loans) on time every month.
• Deposit $500 in a savings account with a bank or credit union and ask for a $500 loan secured by the savings account. The bank is protected because they will “hold” the money in the savings account. Make every payment on time. This will build credit much quicker than using credit cards.
• Prioritize bills. Always pay the mortgage or rent on time. Next pay the utilities, put a fixed amount into a savings account and pay insurance bills.
Figure Out What Caused Past Debts
It takes time to develop new habits, but this can’t happen until the old bad habits are identified. The financial problems could have been caused by a situation that couldn’t be prevented, such as an illness or job loss. Some people, however, get into debt by living a lifestyle that isn’t affordable.
If you’re drowning in debt and need a fresh start, visit Vandillenfloodlaw.com to contact an experienced Bankruptcy Attorney St. Charles MO. The attorneys at Van Dillen & Flood have over thirty years of combined experience in helping people resolve their debt problems.