Financial woes can hit at any point. In many cases, they are unexpected. An individual is navigating a difficult time and is no longer able to keep up with regular bills. Credit cards are relied on to get through each passing month, and before they know it, they are dealing with maxed out credit cards that they cannot begin to address. Debt is overwhelming, and in some cases, cannot be avoided. While not all debt is bad, large amounts of debt are not. Thus, individual need to understand what they can to navigate these troubling times and regain control of their finances.
Bankruptcy may be the best and only solution for an individual or family dealing with financial hardships. In fact, making this move may be the only reason they are able to keep their home, personal vehicle and are able to get back on solid financial footing again. However, the impact a Chapter 13 bankruptcy could have on one’s credit causes a debtor to pause and weigh this option.
There is no doubt that filing for bankruptcy will impact a filer’s credit score, but it does not have to be the end all. In fact, the impact it has on a credit score may not be as severe as one might think. While the filing will stay on his or her credit report for up to 10 years, a bankruptcy filer can begin rebuilding their credit score the moment they file.
How does one rebuild their credit after a bankruptcy filing? To begin, he or she needs to make the necessary financial changes so they do not fall back into the same situation. This means keeping up with their credit score, considering credit card alternatives, getting family support through a loan or being named as an authorized user on their credit card, practice good spending, develop a budget and avoid having any credit cards closed.
Filing for a Chapter 13 bankruptcy is not an easy decision to make. In fact, many consider this process to be one to avoid, resulting in them initiating the process later than they should have. The reality is that bankruptcy can be a real solution and could provide individuals with the ability to obtain a fresh financial start. Therefore, it is vital to explore this option so it is fully understood and prepared for.