Ah. Do you feel that weight lifted off your shoulders? You have successfully filed bankruptcy, and in doing so, you have made your first step toward repairing you credit. It feels liberating to not have creditors calling you on a nightly basis with sometimes-hostile demands that you make payments you can’t possibly afford. Instead of demand letters, you are receiving credit applications. What a difference!
Beware, though. Life after bankruptcy is filled with many temptations to rush to high credit lines and to work with so-called credit-repair companies. After bankruptcy, you are better off continuing to live meagerly and rebuild your credit yourself, slowly.
You are likely receiving credit card offers like you did when you turned 18. Your best option is to select a credit card with the lowest fees and interest you can acquire and use it specifically for occasions where you must use a credit card, like renting a car or using a hotel room. Do not use the card to purchase necessities and for frivolous spending. You will begin living out of your means again and perpetuate the habits that led to bankruptcy. Also, be sure to pay more than the minimum due each month, or you may find yourself in bad shape again really fast.
Another challenge freshly bankrupt individuals face is determining how to rebuild credit. Be cautious about working with credit repair companies. Everything they claim to do for you, you can do on your own (and would likely benefit from doing the legwork). Frequently the companies try to loan you money or claim to be able to remove legitimate items from your credit report. Worse still, some companies will suggest you fudge your social security number on credit applications. Not only are they not doing you any favors, they may put you in a worse position if you follow their “advice” to secure credit fraudulently.
The best thing you can do for yourself once you have started rebuilding your credit is to obtain your credit reports from Experian, TransUnion and Equifax, and check that your debts listed on the bankruptcy have zero balances. Anything that does not appear to be in order should be brought to your attorney’s attention immediately so they can see that creditors and the reporting agencies act in compliance with the court’s order.
Furthermore, you will want to review your credit reports frequently to make sure that your new, good behavior is duly noted. Check for mistakes on the reports and dispute them through the appropriate channels. Take advantage of this opportunity to start over by developing the good habit of reviewing your credit and limiting your spending.