Law Office of Allan E. Dunaway, PLC

Getting credit again after bankruptcy

Kentucky residents who are struggling with debt often wonder how filing for bankruptcy will affect their credit and use of credit cards in the future. The fact is that it is possible to get credit again after filing bankruptcy, but the terms will be drastically different from what people with excellent credit enjoy. However, investing in the right credit cards can help consumers rebuild a positive credit history and eventually restore their good credit rating.

What credit companies look at is the FICO score. These scores are based on past payment history, debt to income ratios, judgments and bankruptcies. The final score will range between 300 at the low end and 850 for someone with excellent credit. A fluid number, it will move up or down on a regular basis depending on the decisions that consumers are making.

Bankruptcy is devastating to credit scores and will result in a lower number. Secured credit cards are one attractive option for consumers who want to show lenders that they are trustworthy again. With a secured card, the credit line is secured by cash that is held by the lending institution. A small amount of interest is paid on the secured balance, but the credit card company can take money out of this account if consumers fail to make payments on time. Most secured cards are relatively easy to get approval for because the lender carries a lower risk with them. As consumers make timely payments and keep the balance at zero, credit scores will steadily rise.

People who chose to file bankruptcy should know that there is credit life after you file. It will take time to restore the credit ratings and start enjoying better lending terms, but there are ways to rebuild the credit and accomplish these goals. Anyone with significant unsecured debt who is considering bankruptcy should be prepared to forego traditional credit cards for a time while they work to rebuild their credit and get their finances back on track.

Source: FOX Business, "Credit Card Life After Bankruptcy", Erica Sandberg, August 21, 2014

Source: FOX Business, "Credit Card Life After Bankruptcy", Erica Sandberg, August 21, 2014

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For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

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