Even though the formal bankruptcy process may end fairly quickly, the process of rebuilding your credit and restoring your financial life is a continuing commitment. Fear of credit damage is usually not a good reason to write off bankruptcy, as struggling with debt outside bankruptcy can damage your credit just as much. However, making the decision to declare bankruptcy rather than continue struggling with debt can put you on a path — albeit a long one — that ultimately ends with the restoration of your credit and financial life.
Filing for bankruptcy harms your credit. There is no way to avoid this. Fortunately, the Fair Credit Reporting Act places a strict 10-year maximum on the amount of time a bankruptcy can appear on your credit report. In the meantime, there are several things you can do to rebuild your credit:
- Use credit reasonably and pay the balance each month — If credit cards are what got you into bankruptcy in the first place, you may be afraid to go down that road again. However, it is impossible to rebuild your credit without using credit. While you may have some difficulty getting many types of credit cards, secured cards or other cards with very low spending limits are widely available even if you have a difficult credit history. Using such a card reasonably and paying off the balance on time each month begins rebuilding your credit.
- Review your credit record — Even if you missed a lot of payments and had a lot of defaults during your struggle with debt, there may still be some information on your credit report that should not be there. Creditors are not always all that careful with what they submit, and credit reporting bureaus perform little or no independent verification. Closely reviewing your credit report may uncover mistakes that adversely affect your credit.
It is important to realize that bankruptcy is not an overnight solution. However, guidance from a dedicated and knowledgeable Georgia bankruptcy attorney and a personal commitment to do what is necessary to rebuild can be a strong first step toward revitalizing your financial life.