Recovering from bankruptcy

Massachusetts residents who have filed bankruptcy can plan a path forward for positive and healthy financial futures.

For many people in Massachusetts, filing bankruptcy may feel like hitting the lowest financial point possible. While certainly filing for Chapter 7 or Chapter 13 bankruptcy is not someone anyone ever wants to do, it can be used as a springboard to a more positive future. Making that happen is possible when the right steps are taken.

Do I need to track my credit score?

NerdWallet explains that reviewing a credit report after bankruptcy is an essential step that all debtors should do. There are many reasons for this. For starters, being able to stay abreast of current credit score ratings is something all consumers should do. It is a good pulse that can keep people aware of their financial situations and potentially alert them before problems get too big.

Reviewing a credit report is also important because sometimes these reports contain errors. It is important to have these items fixed but that cannot be done if the problems remain unknown. Each credit reporting agency will provide input on how best to dispute items or repair incorrect information.

Should I get new credit after a bankruptcy?

Bankrate indicates that establishing new credit may be a smart way to help move forward financially. However, all new credit should be accepted and treated with care. Many people may need to start out by seeking secured credit cards or secured loans. Even co-signed loans may be worth considering although the involvement of another person should be carefully evaluated.

Once approved for a new line of credit or credit card, debtors should keep balances to a minimum and make all payments on time. Balances between 10 and 30 percent of allowable credit are considered reasonable.

Is any credit card good for me?

All credit cards are not created equal. While a debtor fresh out of bankruptcy may not be able to get a credit card with the lowest possible interest rate, other factors should be watched. Of particular interest is making sure that the lending bank regularly reports to Experian, Equifax and TransUnion. This reporting is the only way that a credit score can be positively affected by use of the credit.

Should I switch to a new card when I can?

Over time, a debtor may be eligible for credit cards with better rates. This can be a positive thing but it is also important to know that lenders like to see credit histories that last a long time. It may even be worth asking a current bank about options for lowering interest rates instead of switching lenders.

How can I learn more about moving past bankruptcy?

Talking with an attorney before, during and after filing for bankruptcy is the best way to get the facts about life after bankruptcy. This can help Massachusetts residents understand the laws and nuances of financial health.