How to Survive a Chapter 7
- 1). Apply for a secured credit card with a financial institution. Many people who have been through bankruptcy file for a secured credit card shortly after the bankruptcy goes through and get approved. This type of card uses some type of collateral, usually cash, to guarantee the credit line. While this type of card may not necessarily help you financially, it can help your credit significantly. The secured credit card company reports to the credit bureaus, and moves your credit score in the right direction. Using the card regularly in small amounts can help you build a stronger credit profile.
- 2). Get on a cash budget and stick with it. After filing bankruptcy, you will most likely not be able to get many sources of credit as you could prior to the bankruptcy. This can actually be an advantage when you are trying to rebuild your credit score. You can use only cash or your secured card to make purchases and you can save more of your income. Set a specific monthly budget for all of the different areas that you spend money. Implement the budget and stick to the plan.
- 3). Monitor your credit report so that you can determine if you are making any progress. By looking at your credit report regularly, you can also spot any mistakes or fraudulent charges. This will provide you with a way to safeguard against identity theft. You could sign up for a credit monitoring service, which will give you access to your credit report on a frequent basis.
- 4). Avoid companies that promise to be able to make your bankruptcy disappear. Many scam companies in the market prey on unsuspecting consumers who have recently filed for bankruptcy. If you pay anyone a fee for this type of service, you will most likely end up disappointed and lose your money.
- 5). Stay in your current job for as long as possible. While you may be tempted to jump to another career, staying in one place for an extended period of time helps your credit history. Lenders will look at you as a lower-risk borrower if you're not bouncing from one employer to the next.
