Filed Bankruptcy? Now To Rebuild Your Credit Score

So you’ve had some financial misfortunes that led you into bankruptcy? Not to worry! Bankruptcy offers an opportunity to rebuild your life, as you can learn from your mistakes and start over fresh with a new perspective and knowledgebase. While it’s true that bankruptcy can provide freedom from your financial woes, it does have an adverse effect on your credit score. Regardless of whether you chose Chapter 7 or Chapter 13 Bankruptcy, the next step you need to take is to start rebuilding your credit.

Rebuilding Your Credit Rating

One of the worst side effects of filing for bankruptcy is the hit your credit record takes; It can take several years and quite a bit of TLC to get your credit back on its feet. However, this doesn’t mean that you should give up on hopes of ever getting another car loan or mortgage in the future. If you are ready to make some life changes and develop a financial strategy, then you can steadily rebuild your credit rating after filing Chapter 7 or Chapter 13 bankruptcy in Chicago.

Additionally, some loans, credit cards, etc. will still be available to you. However your focus needs to remain on improving your credit score. This means you’ll need to pay your bills on time, every time. Missing even one payment may set you back even further. Not missing even a single payment is the number one key to rebuilding your credit.

If you are lucky enough to get a credit card or store card after your Chapter 13 or Chapter 7 bankruptcy in Chicago, you should use it as tactfully as possible. Make use of this credit card for a minimal amount every month. Make sure you pay off the credit card bill on time each and every month. This will show that you aren’t getting ahead of yourself with big purchases, and that you can consistently make your payments. Essentially, you need to show future creditors that you are no longer a risk for them to invest in.

A small charge of 10 to 20 dollars on your credit card is sufficient to show that you can use a credit card and repay it without issues. If you feel you are beginning to use the card more than necessary, it is advisable to take a debt management course that will give you pointers on how to avoid financial troubles. Your bankruptcy attorney in Chicago should be able to give you a reference for a financial counselor who will help you to organize your finances in the best way possible.

For more information on rebuilding your credit score or filing bankruptcy, contact Chang and Carlin, LLP today for a Free Bankruptcy Consultation.

Chapter 13 Or Chapter 7 Bankruptcy: Which Is The Right Choice?

In these days of unstable world economics, many businesses are finding it tough to profitably carry on as they had in the past. This in turn has lead to job loss and instability for many Illinois citizens. While things are currently looking up economically, many are still struggling and turning to bankruptcy to get back on their feet.

Bankruptcy should be a last resort for both firms and individuals who are facing financial troubles, but it can be very effective under the right circumstances. There are several types of bankruptcy, each of which are explained in the U.S. Bankruptcy code. The most commonly used are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy in Chicago

If you file for bankruptcy under Chapter 7 in Illinois, almost all your assets will be sold off to pay debtors. Then the remaining outstanding debt is then written off, with a few exceptions. The firm or individual is given a clean slate and is free to begin life anew. You’ll want to find an experienced Chapter 7 lawyer in Chicago to help you save as many assets as you can and still ensure you start off with a clean slate. However, you need to keep in mind that you’ll lose assets and your credit rating will certainly suffer.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy, on the other hand, avoids liquidation of your assets, and if you are a firm, you can carry on normal operations. The bankruptcy code will agree on a plan to repay your creditors over 3 to 5 years, depending on an agreement between you, the court, and creditors. You’ll then be protected from your creditors, and be able to concentrate on getting your financial affairs back on track.

Once you have filed for bankruptcy, your creditors cannot pester you for payment as long as the repayment plan is adhered to, regardless of the chapter you file under. Chapter 13 bankruptcy in Chicago does not affect your credit rating as badly as a Chapter 7. The former also allows firms to continue functioning instead of closing down, and individuals to regain control of their financial affairs without losing their personal assets.

Each type of bankruptcy has its own set of pros and cons, so it’s best to approach a qualified and experienced lawyer to explain the intricacies of each so you’ll understand which chapter of bankruptcy will work best in your situation.

If you are filing for bankruptcy in Illinois, get in touch with Chang and Carlin, LLP today for a Free Bankruptcy Consultation. We understand what you’re going through and can help you navigate the bankruptcy process with precision.