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How to recover quickly from bankruptcy

| Jun 6, 2019 | Chapter 7 Bankruptcy

For many people in Connecticut, debt can quickly spiral out of control. When this happens, Chapter 7 bankruptcy may be the absolute best option they can consider. According to CNBC, in 2018, only 733,000 people were expected to file for bankruptcy. This is a steep fall from 2010’s whopping 1.5 million filings.

Filing for bankruptcy can be a scary experience, but it is not the end of the world. Forbes note that even though bankruptcy remains on a person’s credit report for up to a decade, there are ways to speed up the recovery process. In fact, 65% of bankruptcy filers manage to pull their scores up to 640 or higher in just two years. Here are three ways they get this done.

1. Credit monitoring

The only way a person knows when they hit that 640 or higher range is when they monitor their credit score. There are many free services individuals can use to do this. Some of the most popular ones include the following:

  •          CreditKarma
  •          NerdWallet
  •          Lending Tree
  •          Creditwise from Capital One

2. Unsecured credit cards

Unsecured credit cards allow people to secure cards backed by a cash deposit. Most banks limit the card to the deposit provided like an ATM bank card. While this does not extend real, usable credit to the user, it helps them to build healthy financial habits. If they use the card responsibly, the bank may offer an actual credit card in the near future.

3. Get rid of old patterns

The need to file bankruptcy rarely happens overnight. Sure, someone could make one big business investment and lose everything. Other people may become ill and fall into financial hardship because of medical bills. But, in many instances, bad spending and poor budgeting habits are the culprits. It is best to nip these in the bud to ensure there is a never a need to file for bankruptcy again.

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