Bankruptcy is no walk in the park. When Florida residents give in and liquidate their assets, it usually means they have exhausted all other possibilities and cannot see any other option. It may even feel like they have just stepped over the edge and may never recover a normal life again, but it does not have to be that way.
Declaring bankruptcy does require some serious reflection. The individual or couple should think long and hard about the journey that led to the insolvency and work to correct any obvious missteps. If spending habits were out of control, for example, and credit cards were the back-up emergency fund, those habits will need to change. Financial counseling may be in order, too, to help get the involved parties back on the right track.
Once new habits are in place and the individuals are ready to rebuild their credit, the National Foundation for Credit Counseling has some tips for how to do that:
- Open new accounts, checking and savings
- Get a copy of the latest annual credit report
- Be careful not to apply for too much new credit too fast
The U.S. News & World Report reminds those who have experienced bankruptcy that depending on the type they filed, their credit report will reflect the decision differently. Chapter 7 filers will have to wait 10 years for their credit to clear while Chapter 13 filers will only have to wait seven.
In the meantime, the report suggests paying bills on time as a primary way to begin rebuilding credit. Other options to consider are secured credit cards and credit builder loans.