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Already got a mortgage :: After bankruptcy where you are?

Author: Jessica
Subject: After bankruptcy where you are?
Posted: Tue Nov 29, 2005 7:08 pm (GMT -8)
Topic Replies: 0

You may have filed for bankruptcy and the court has granted your appeal.

But what next? You can't wait for things to change for the better, rather you will have to make things turn around and work for you. The bankruptcy filing will stay on your credit report for long 10 years and it will surely affect your credit status. But even then, you may qualify for loans or credit cards, although the rates and fees will simply be sky-high.

While you file any of the 2 types of personal bankruptcy, a court-appointed trustee has sold off your assets to make you debt free or you are following a 3 to 5 year repayment plan to pay down the debts. Both cases require good money management skills on your part so that you are relieved from debt problems in a few years. This demands changing your lifestyle, limiting your expenses to the minimum and developing money saving skills.

You may be paying your debts through a chapter 13 repayment scheme, but even then, creditors consider it quite risky to offer you a loan. They will most probably offer you high rates and additional fees. Therefore, what matters after bankruptcy is how you can rebuild your credit. The faster you do so, the better it is for you.

If you have filed for Chapter 7, you are already in the process of repairing your credit as all your debts have been wiped out by the sale of your assets. But with discharge of debts under Chapter 13 bankruptcy, you should start rebuilding your credit. Try to make regular payments on your bills and try to set up a savings account for future expenses.

If you are really interested in taking credit, you can apply for one only after 6 months. With timely payments on your bills within these 6 months, you may be lucky enough to get a card limit higher than the actual deposit in your account. But consider taking a credit card that applies to one and preferably all the credit bureaus. Once you can get a secured card, within a few months or a year of timely payments, you can apply for an unsecured card. But avoid taking more than one card, as frequent inquiries may affect your credit score. Also, get prepared for a high APR that will exhaust a lot of your income.

Bankruptcy makes you pay high interests on your loan and also affects your insurance rates. Insurance companies do check out your credit score before they allow you to purchase a policy. Employers also look out for your credit score before offering the job or promoting you to higher positions. You can make things easier for you if you can list the possible causes of your bankruptcy on your credit report, in case you have filed due to divorce or business failure.

Bankruptcy does have an adverse affect on your credit rating and within the next 2 to 3 years after filing, you find yourself struggling hard to restore your financial position. The only way to improve your financial status is to maintain good credit paying habits. This will help in easy loan approvals, lower rates and better transactions for your home mortgage or any other loan.

For the full story see:
http://www.mortgagefit.com/bankruptcy/after-bankruptcy.html
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