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4 ways to rebuild credit after filing for bankruptcy in Florida

Filing for bankruptcy in Florida may be a setback in terms of credit scores, but it is certainly not the end of someone’s financial future.

Every year, thousands of people in Florida seek the protection that filing for bankruptcy provides. In fact, according to a 2016 report from Nerd Wallet, several Florida counties made the top 100 areas for the highest incidence of bankruptcy, including Miami-Dade County, which saw more than 400 personal filings per 100,000 people from April 2015 to March 2016.

As many people know, a bankruptcy can do some damage to a consumer’s credit score, causing it to drop hundreds of points. Fortunately, there are a few steps people are able to take that help to rebuild that credit.

1. Pay bills in full and on time

A key step after filing for bankruptcy is to pay every bill for the total amount due, and pay it on time. Failing to do so simply creates more negativity on someone’s credit report. When bills seem too high, it may be possible to negotiate a payment plan with the creditor in order to avoid adverse action.

2. Check your credit report

Every year, people are entitled to check their credit report for free one time. This is a vital part of maintaining the correct score. Mistakes on credit reports could be costly. Checking it enables people to catch errors and have them rectified.

3. Get credit

Some people may believe that a bankruptcy ruins their financial future and any chance at obtaining a credit card or loan. That is simply not true. However, there may be some stepping stones between where they are now and where they want to be in terms of rebuilding credit.

Getting a secured credit card or a secured loan is a good way to prove to creditors that people are able to use credit responsibly. These are essentially ways to borrow money against a deposit the consumer has already made. There may be high interest rates involved, but those only come into play if someone pays their bills late.

4. Create and manage a budget

Finally, and perhaps most importantly, every adult should have a budget. This is simply a way of tracking money that comes in and money that goes out each month. It sounds easy, but one Gallup poll estimated that only one out of every three households in the country operate on a budget.

Consumers should create a budget based on their income, subtracting expenses such as rent, groceries and bills from that. Every budget should include a way to save money every month, even if it is just a little bit. This creates an emergency fund that can mitigate unexpected expenses, which could be detrimental to a credit score.

For many people, filing for bankruptcy is a way to start over. By following these steps, consumers have a better chance at a bright financial future. People who have questions about this topic should speak with a bankruptcy attorney in Florida.

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