Bank finance articles and tips

Declaring personal bankruptcy is one of the smartest financial moves that you can make after struggling with crippling debt. Your credit score has long been suffering thanks to your battle with debt - and a Chapter 7 or Chapter 13 bankruptcy can put an end to that battle.

However, what about your credit after a personal bankruptcy? With so many financial experts claiming different "facts" about what happens to your credit - and what you should and shouldn't do about it - it can cause much confusion for those looking to take advantage of the second chance that bankruptcy affords. After all, there are many questions that need answers: should you forgo having credit after declaring bankruptcy? Should you stick to a "cash only" lifestyle?

It's a very popular conception that if you stick to a "cash only" lifestyle after declaring bankruptcy, you'll manage to stay out of the kind of credit trouble that caused you so much grief in the first place; in fact, many consumers are afraid of credit altogether. They think that mounting more credit card debt is a surefire recipe for financial disaster.

While this may be true, there's no need to treat credit like a rattlesnake - besides, in order to rebuild your credit score after struggling so long with debt, you're going to need to some form of credit. Rebuilding your credit history after declaring bankruptcy is an important part of the overall recovery process, and should be taken quite seriously. A Chapter 7 or Chapter 13 bankruptcy will give you a much-needed second chance at your finances - be sure not to waste it.

In today's society, it's nearly impossible to make some purchases without some form of credit. You may think that you can get by on your "cash-only" lifestyle, but what about when it comes time to buy a new home or a car? Sure, you could try applying for that loan on a whim, or wait until you really need that new credit card - but more than likely, you'll be denied for a lack of a proper credit history. Even if you've been financially responsible and savvy, lenders, creditors and banks will have no record of it.

Your credit score should be one of the most precious financial assets that you have - and you need to take the proper steps in order to protect it. You want to demonstrate to future lenders and creditors that you're financially stable, and will be able to handle the responsibility of a new loan or credit card without missing payments or going into default. Additionally, you'll want to prove this new financial responsibility through credit, since credit reports don't show newfound stability that's based solely on cash.

Take the first step to ensure that you get the right credit after declaring a personal bankruptcy. Apply at your bank or with a reputable lender for a secured credit card, which requires a deposit to secure and acts just like a credit card in the eyes of the credit bureaus - without the sky-high interest rates or outrageous fees.

Reed Allmand, sponsoring attorney for Bankruptcy.net, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit http://www.bankruptcy.net for up to date news and information you need to know.

By Reed Allmand
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