Many people thinking of filing for Bankruptcy have questions about how their life will look after their debts are discharged. Even after the bankruptcy is finished, it will be visible to creditors for ten years after the end of proceedings. Before filing for bankruptcy, it is important to have a clear understanding of what the implications are and how to restore your good name in the eyes of creditors.

Refine your lifestyle.
If you are thinking of filing for a Chapter 13 bankruptcy, in which you pay back a portion of your debts over approximately three to five years, your income will be distributed by the court between your living expenses, and a trustee, appointed by the court, will divide the rest to your creditors. The court will also be party in your decisions to take on new debt during that time, such as credit cards and loans. If you are filing for Chapter 7 bankruptcy, although, when it is over, you will have no further obligation to the court, with evidence of the bankruptcy still on your credit, it will be necessary to live on your cash, without relying heavily on credit. Thus your lifestyle expenditures may need to be paired down. Savings is also imperative, as you may need funds to fall back on in an emergency.

Rebuild good credit.
If you managed to retain a credit card or your home mortgage throughout the process of bankruptcy it is important to maintain regular, on time payments to demonstrate your ability to payback your creditors. Obtain a cash backed, or secured credit card. Many report as unsecured and may even give a higher credit limit than your cash deposit. Shop lenders with the lowest rates and fees, and beware of credit scams that want fees upfront instead of after you’ve made a cash deposit.

Pay all bills on time.
Maintain your good standing with lenders and creditors. It may take ten years for the bankruptcy to not show up on your credit report, however, the longer you go making an effort to remain in good standing with your creditors, the less it will matter.

Build up a savings account.
While making all your payments on time is key, you don’t want to put yourself in a position where you would need to rely on credit to get you out of a tight spot. Working on building your savings is vital for when you have the inevitable bump in the road. With an emergency fund in place you will not have to worry about using credit or about falling behind in payments that are reported to the credit bureaus.

A Few Common Myths About Life After Bankruptcy.
There are many myths and misconceptions about how bankruptcy proceeding will disrupt one’s life. Credit experts as well as people who have been through this process report that many of these are simply not true. Here are a few of the myths:

• Bankruptcy will automatically disqualify you from a getting a mortgage for 10 years. In truth most people can qualify for a home loan within around two years after their discharge and it is even possible to qualify for an FHA loan while going through a Chapter 13 bankruptcy.

• Getting a new credit card will be impossible for around seven years. Actually many consumers reported receiving many credit card offers almost immediately after their bankruptcy was finalized.

• Car dealers and lenders will charge huge interest rates in order to approve your application. There are in actuality many auto companies and lenders willing to provide reasonable rates for a post bankruptcy loan. They have plenty of competition and one of them will likely want your business.

• It will take a decade to establish a positive credit rating.  Not so. While the bankruptcy will remain on your credit for ten years,  it is possible to reestablish good credit. Credit scores are changeable! They tend to reflect your more current activity, so it is possible to start building good credit as soon as you start working on it. It takes careful monitoring and good habits and you could start rebuilding today.

Focus on the end result: free of debt.
The mental and emotional toll of debt is often overwhelming. If you have been struggling with this for years, bankruptcy is probably an option for you. It is not a quick fix and may take some time, but with the right advocate on your side, you will have someone to walk you through the entire process, encourage you, and help you to see there is a light at the end of the tunnel. Robert H Pflueger is available to advocate for you, to help you take the right steps in reaching your goals, and put your mind at ease.