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Michael D. Hart, P.C.
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How to build credit after bankruptcy

Virginia residents who have filed for bankruptcy, might wonder if they will be able to reestablish a quality credit rating. A survey by Lending Tree found that its users who had filed for bankruptcy within the previous three years were offered mortgages at an average of just 19 bps higher than people without a bankruptcy on record. Furthermore, just two years after bankruptcy, most people had achieved a credit score of at least 640.

One of the best ways to start reestablishing a good credit record is with a secured credit card. While the credit limit will initially be about the same as the deposit amount, paying off charges on a monthly basis will show fiscal responsibility.

A credit monitoring service can help a recovering debtor keep an eye on both the rising credit score and any identity theft that might occur. As the credit score goes up, the person may get the opportunity to apply for regular credit cards and other loans. However, it is still important to not misuse credit. People who fall into debt because of overspending may want to create a written budget after a bankruptcy filing.

The type of bankruptcy a person files is determined in part by income. With a Chapter 7 bankruptcy, some assets may be declared exempt from liquidation. In addition, filing for bankruptcy will immediately put a stop to any actions by creditors including lawsuits and more. An attorney may be able to assist with bankruptcy paperwork since it can be complex and any errors could cause a delay in the filing.

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Michael D. Hart, P.C.
19 Church Street Southwest
Roanoke, VA 24011

Phone: 540-627-6520
Fax: 540-342-7655
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