When people file for Chapter 13 bankruptcy, it is normal to feel both relieved and saddened. They feel relieved because they finally have a plan to get their debt back under control. The sadness comes from the realization that Chapter 13 bankruptcy remains on their credit history for up to seven years. Especially for the first few years, this can make it difficult to get a credit card, rent a nice home, buy a car or get a mortgage.
Because of this, many people simply give up on their financial goals. This is an unfortunate situation. While bankruptcy certainly puts a damper on financial plans for the near future, it does not put an end to them. The more people focus on recovering financially and improving their credit score, the faster they can get back on track.
Bankrate recommends creating a budget, to get a better handle on income and expenses. Then, try to use cash instead of credit. It is easy to go over budget when all a person has to do is swipe a card to pay. Counting out cash and needing to have it in hand at the time of purchase makes overspending more difficult.
By reducing the likelihood of overspending, consumers can focus on paying all their bills on time, every time. This is the first step toward improving credit history. One blemish is one thing. A history or pattern of blemishes is quite another. To help balance things out even more, try to add utility bills and other accounts with spotless payment histories.
Experian also recommends keeping an eye on credit reports. This is especially true after reaching the end period for the bankruptcy record to drop off the credit report. The last thing anyone wants is for it to hang around for longer than necessary. If it does, be sure to call the credit bureaus to ensure it will be promptly removed.