Reestablishing credit after bankruptcy in Salt Lake

Filing for bankruptcy can damage a person's credit. However, there are ways to rebuilt it after bankruptcy.

For many people in Salt Lake and throughout Utah, filing for bankruptcy is one of the most difficult decisions they can make. Often times, people may declare bankruptcy when they have run out of other options and need to gain freedom from their overwhelming financial burdens. There is no question that when people have a bankruptcy listed on their credit report, it can have a major impact on their ability to purchase a home, be approved for a loan or open a bank account. The good news is that while bankruptcy essentially allows people to purge most or all of their debt, people can rebuild their credit following a bankruptcy discharge.

Getting educated

In order to file for bankruptcy in Utah, debtors must complete both a credit counseling and debtor education course. Not only do these courses explain the effects of filing for bankruptcy, they also offer people financial assistance when it comes to creating a budget, living within their means and reestablishing credit. Debtors should also check their credit report and know what their current credit score is. While a bankruptcy can last for 10 years on a person's credit report, there are things people can do to get back on their feet and reestablish a workable credit. The options may change depending on whether the person filed for Chapter 7 or Chapter 13 bankruptcy.

Developing credit

Once people have a grip on their budget, they may want to consider applying for a credit card that has a low spending limit. There are several credit agencies that approve people who have a bankruptcy on their record. However, people must be extremely careful when applying for these types of cards as some carry high interest rates and yearly fees. People should be careful to only charge small amounts and pay off the entire balance every month.

Debtors that have reaffirmed their secured loans or car payments while going through the bankruptcy process can also help to rebuild their credit by making their payments on time.

Obtaining legal counsel

Whether you have already started filing for bankruptcy or you are simply considering your options, you may want to speak to an attorney in Salt Lake regarding your financial options. A bankruptcy lawyer may also help out by looking at the specific details of your case and finding the route that will best fit your situation. By getting your credit back on track, you will be on your way to building a solid financial future.