Bankruptcy is used to discharge debt when it becomes too difficult to pay it off in full. It can also be used as a getting started on your credit repair journey. There are several types of bankruptcy, and each has a different length and severity.
Most often, service members are sent the standard version of bankruptcy, which is either unsecured (no real property or possessions) or secured (credit cards and loans).
Unsecured bankruptcy is typically only for people with very little debt who do not need a formal loan from a court. A simple listing of debts may be enough to get you out of jail and on your way to recovery.
Secured bankruptcy is where a person repays credit cards and loans with property they owe on the bank account or with loans they do not own but whose interest charges are paid by the bank. This type of bankruptcy requires hard work, but can help restore your good credit status.
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Seven years after bankruptcy
After seven years, your bankruptcy may still be on your credit history. This can happen if you have a hard time paying off your debt during the full length of your loan term.
Many loans have parole periods after each payment. During this period, you may not be able to increase the balance on your loan unless you go into a program to help with it.
If you are ever in a position where you need to borrow money, look for new loans that have a longer term and/or moreloans that have higher interest rates. You may be able to pay off the new loan faster by working harder than someone who has been in bankruptcy before!
How long does my debt remain on my credit history? This depends on several factors such as: the type of debt, how much I have left to repay, how long it took to pay off, and whether or not I made any changes to my lifestyle since paying.
How to improve your credit after bankruptcy
While most people focus their credit improvement efforts on their credit cards, it is also important to improve your overall credit scoring using old cards. This can help you improve your score in both new and existing CARD Act card programs.
In order to get started, look up the card number on the new card and see if you made any payments and charges since it was opened. If so, you may be able to get some more favorable terms on the card from a spend-spend basis.
If not, try another card that has good reviews, but that has been used less recently due to a recent change in lifestyle.
You can also try looking up old cards using CardXchange.
Pay back what you owe
While most people understand the importance of going along with debt, many people don’t know how long it should stay on your credit.
In most cases, a credit card account will stay on your credit for a year or so. After that, you can try to get new cards and accounts, but they’ll have to be good credits.
If you have lots of bad credit loans on your credit, it may take a long time to drop them. Until then, you must keep paying off the debt at the current rate, at least until it’s paid in full!
Many banks and financial institutions only allow one account per person with one set ofcredit cards, so if you have new debts coming onto the system they must be dealt with by that account. It can get expensive and complicated when many debts are involved.
Stop using credit completely
Once you’ve filed your bankruptcy, it’s time to for credit to go away. That is, unless you have some credit card or bank account charges, because you file bankruptcy, you can no longer use any of your existing credit cards or bank accounts because of your debt.
You can only start a new credit card or bank account account for charge cards and bank accounts that have been in use for at least a year and have not been reported as stolen. You must also notify all of your current lenders that you are ending your debts.
It takes around six months for the new credit limits on your accounts to arrive at their max, and during this time, you must stay on track with paying off the debts.
File again for bankruptcy
If you can’t get a new loan in an amount of time, you can still file for bankruptcy. The process will still be long, but again, you can return to it again and again as your situation changes.
The law allows you to go back to the same lenders and request a credit card or bank account credit limit increase if the first application was denied.
It is possible to apply for a new credit card at another company, though it may take a while for them to respond because of the length of time you have been out of debt.
You can also contact your old debtors and request that they help you get back on the right track. You may even want to look into applying for another credit card at another company as a way to start anew.
These tips can help keep your debt from destroying your credit score and ability to obtain new loans down the road.
Talk to a lawyer about filing for bankruptcy
If you’re just starting your financial journey, it’s best to talk to a lawyer about filing for bankruptcy. It can be easy to get caught up in the whirlwind of bankruptcy and all the changes, but with it comes confusion.
You may be put off by all the names of things and terms used in bankruptcy, such as reorganization plan, liquidation, and discharge. All of these refer to steps in filing for bankruptcy, which can be confusing.
Filing for bankruptcy is not a silver bullet and does not put you back on track immediately. You still have responsibilities including paying bills, making necessary changes to your life changes you want to make, and finding new ways to pay your bills.