5 Steps to Take After Declaring Bankruptcy

About 1 million Americans filed for bankruptcy in 2013. If you were one of them, you’ve likely heard that bankruptcy will stay on your credit reports for 10 years. You might be assuming your life is over — at least financially — for the next decade, but you’d be wrong. Bankruptcy does do major damage to your credit scores, but you can take action right now to turn things around and rebuild your credit.



Your first step after finalizing your bankruptcy is to order your credit report from the three major credit bureaus. By law, you’re entitled to one free credit report a year from each bureau, which you can get online. Check your reports and make sure every debt included in your bankruptcy is listed that way on your credit report. Check for errors — things like accounts that aren’t yours and closed accounts showing an open status. If you find mistakes, dispute them with the credit bureaus.


Once your credit reports are squared away, it’s time to get new credit. Many people shy away from credit cards after bankruptcy, fearing they won’t get approved or they won’t be able to manage the credit line, but having credit is an important way to start rebuilding your credit scores. Start with a secured credit card. Because you put down a deposit for a secured card, most people get approved, and your credit line will equal your deposit.


Your payment history makes up 35% of your credit score. Always make sure you pay your bills by the due date each month to start racking up good credit. Pay early to make sure your payment arrives on time. Also, charge no more than 30% of your credit limit. Some experts advise that you keep your charges at no more than 10%. And aim to always pay off the balance each month. This will keep you from taking on more debt than you can afford to repay.


Now that you’ve established some credit, start building up some cash reserves to cover emergencies. Many experts suggest you have three to six months’ worth of expenses saved in your emergency account. For more information on emergency funds and how to get started click here.


Old money mistakes don’t make you a loser; they make you human. Everyone makes mistakes from time to time. The trick is to learn from them. Identify where you went wrong with your personal finances and aim to do better now that you’re rebuilding your financial life. For example, if you had a hard time paying your bills on time, set up reminders on your smart phone or computer so you won’t miss another due date. If you simply took on too much debt, give yourself a set limit you can spend each month, track your spending and don’t go over. There are many online tools to help you with budgeting your money by providing spending spreadsheets, specialized calculators and advice for spending within your means. Whatever your mistakes were, they were just that — mistakes. You’ve got another shot to do things differently now.

For more information check out our previous post on bankruptcy “What Creditors Can Be Discharged in a Bankruptcy” or our Seattle Bankruptcy Attorney page to see how we can help. If you would like to speak with a bankruptcy attorney in Seattle for more detailed information on what steps can be taken to move your financial life forward again, contact Integrity Law Group at (206) 838-8118 or admin@integritylawgroup.net.