During the recent economic crisis, bankruptcies have skyrocketed. In 2010 alone, over 1.5 million non-business bankruptcy filings were issued, a 9% increase over 2009. Cuts in wages or work time and job loss are the biggest culprits, but the atmosphere for bankruptcy can also be created through accident, illness, divorce and other uncontrollable circumstances.
Once a bankruptcy has been discharged, all listed debts and your responsibility to pay them are erased. However, your credit report is tagged with the dreaded “BK” code, making it nearly impossible to get a loan or credit card and, if you do get them, they are at extraordinarily high interest rates.
If you are one of the millions of individuals who have gone through a bankruptcy, what can you do to repair your damaged credit?
Important Credit Repair Steps
The first step towards credit repair after bankruptcy is to create a budget and stick to it. Most of your debts have been eliminated. However, certain items, such as student loans, are not discharged and therefore need to be paid.
You also want to acquire new credit as soon as possible. It may seem to make sense to avoid credit at this point, but doing so will actually damage your credit further. Acquire department store or gas credit cards, use them and pay the balances off monthly.
Also, make sure you make payments on time. If you have problems with this, set payments up on an automatic service, this will ensure timely payments which is important to restoring good credit. After awhile, your good payment habits will overcome your past bad habits and your credit score will increase.
Clean Up Credit Report
While you work on creating good, new payment habits, you should also review, monitor and clean up your credit report. You should request copies of your report from Equifax, Experian and TransUnion, the three main credit unions and review them to make sure all items under your bankruptcy have been properly labeled (usually with “BK”).
You should then make note of any errors or discrepancies contained in your report. Once all are listed, write each credit bureau showing errors a Letter of Dispute, contesting each charge in its own paragraph. Give reasons for the dispute and include any validating documentation for your claims.
Get Professional Legal Help
Bankruptcy items are difficult to remove from a credit report and normally remain for 10 years, negatively affecting your credit. However, tough items such as bankruptcies, foreclosures, tax liens and judgments can, indeed, be removed from credit reports under certain conditions.
However, it takes experience, expertise and knowledge for any chance of getting these troublesome items removed and, therefore, requires the skill of a professional credit repair attorney. At Repair-Credit-Today.com, we provide a network of expert credit repair attorneys and paralegals which will skillfully help you achieve credit repair after bankruptcy.