Rebuilding Your Credit

Texas Bankruptcy Attorneys

Some people think that filing for bankruptcy will leave a black mark on their financial records. In particular, people wonder how their credit rating will be affected. The truth is that, far from being a black mark, bankruptcy is a great way to rebuild credit. It is seen as a good-faith attempt to get your finances in order.

At Fears | Nachawati, our lawyers are devoted to helping people throughout the Dallas-Forth Worth area, Austin, and Houston get back in control of their finances. We would never encourage bankruptcy if it threatened your future financial situation.Contact us and set up a consultation with one of our lawyers.

Rebuilding Credit with a Chapter 13

When going through a Chapter 13 bankruptcy, you are making payments every month. A bankruptcy court consolidates all your debts and gives you a total that you pay to the court each month. This total is significantly less than you would pay otherwise, because it is made to be a payment you can handle with your current income.

Just keeping up with your Chapter 13 proceedings repairs your credit score. And when you are done and your debts are discharged, you can immediately begin rebuilding your credit further by using credit cards responsibly.

Rebuilding Credit with a Chapter 7

As for a Chapter 7 bankruptcy, you can start repairing your credit immediately after the bankruptcy proceedings are complete. You just need to get a credit card or gas card and then pay it in full every month. In a 6-month period, you will see a significant improvement in your credit score.

Keep Track of Your Score

Whether or not you are considering a bankruptcy, it is always wise to keep track of your credit score. There are three credit bureaus (Experian, Trans Union, and Equifax), and each maintains a credit report for you that gets shown to banks, lenders, etc. You should request a report from each agency several times a year, especially when rebuilding your credit.