Households in North Carolina are being pushed to the financial brink right now as a large proportion of the population has either lost their job or had their wages cut. Bankruptcy may end up being the only way out for many who end up overcome by debt. Fortunately, there is a way to rebuild their credit after they file.
The most important thing to remember is to go slowly when taking on new debt right after emerging from bankruptcy. It will show a bad trend on a credit report when a person moves to borrow so soon after defaulting on prior debts. Instead, they should begin with secured credit cards before slowly dipping a toe in the water when it comes to future borrowing. The key is to begin a series of new financial habits, even if the bankruptcy was completely unavoidable because creditors do not know the circumstances behind the bankruptcy. Consumers should also closely monitor their credit reports during this time to make sure that there are no errors.
Fortunately, the trend in credit scores is up after the filing. The effect of the bankruptcy will lessen every year, even before it leaves the consumer’s record. The hope is that turning over a new financial leaf can allow the score to continue to increase without adding any new derogatory information.
Those who find themselves trapped in a cycle of debt or are in financial distress might benefit from consulting with a bankruptcy attorney. The lawyer may help explain the process to their client along with helping them decide which form of bankruptcy may work best for them. It is a difficult choice to make to file for bankruptcy, but an attorney may at least explain the options to their client and put them more at ease.