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Bankruptcy and building credit again

South Carolina consumers who are considering bankruptcy might be concerned about how they will rebuild their credit. Depending on whether a person has filed for Chapter 13 or Chapter 7 bankruptcy, the bankruptcy will remain on credit reports for seven or 10 years, but this does not mean that their credit is ruined. There are several steps people can take to improve their credit.

Preparing a budget is important because payment history is 35 percent of a FICO score. Furthermore, with a budget, a person can also begin building an emergency fund. If the unexpected happens, an emergency fund means a person is less likely to need credit cards or services like payday loans and therefore is less likely to need to file for bankruptcy again in the future.

The three credit reporting agencies offer one free credit report each year, and these should be reviewed regularly for any errors. A person should also use a credit card and pay it off regularly. If it is not possible to get a regular credit card, a secured credit card is usually available. With a secured credit card, people place a certain amount of funds into an account and that is their credit card limit. They can then use it like any other card.

People may need to declare personal bankruptcy for a variety of reasons including medical bills, divorce and job loss. Bankruptcy may be a responsible way to get a fresh start, and filing might lead to peace of mind since it puts an immediate stop to any action by creditors. An attorney can outline the differences between the two chapters and explain the eligibility requirements of each.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
Fax: 803-764-1563
Columbia Bankruptcy Office

Columbia Office

Charleston Office
925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
Fax: 866-481-2325
Map & Directions

Charleston Office