A personal or business bankruptcy is not the end of your credit world. There are some specific things you can do to repair your credit after a you have experienced a Chapter 7 or Chapter 13 personal bankruptcy or a Chapter 11 business bankruptcy.
The difference between a Chapter 7 and a Chapter 13 is whether the Bankruptcy Court discharged all of your declared debt in the bankruptcy proceedings (a Chapter 7) or whether they created a schedule of partial repayment of your debt (a Chapter 13) and there- fore discharged the BK after the repayment.
First of all, in a Chapter 13 your record of debt repayment with the Bankruptcy Court becomes a powerful, documented item of your credit history. Make sure you pay the Court right on time and even, if possible, pay off the Chapter 13 early. This will be viewed as a very positive step in the right direction.
What can I do to rebuild my credit?
Here are some suggestions that have proven to be quite successful:
- Always, always, always make your payments on time after you have experienced a bankruptcy. Any late payments are viewed by an underwriter much more harshly because of your past experience.
- Don’t back off obtaining more credit. Do the opposite. Gradually rebuild your credit history. In a previous article I have outlined five steps for building credit accounts. These will work for you as well.