Many people talk about debt management and the possibility of filing for bankruptcy, but what options await after the dust has settled for those who take this step. Many individuals who file for bankruptcy in New Jersey and across the United states worry that filing will result in a forever damaged credit score and an inability to ever take out loans again. While bankruptcy certainly hits a person's credit score hard, recovery and measured future debts like car loans are not as impossible as they may seem.
New data from Lending Tree reveals how peoples' credit scores actually recover after filing for bankruptcy. According to their data, over 40 percent of Americans' credit scores will reach other 640 just one year after filing. Furthermore, 65 percent maintain or improve this score three years after the fact.
The people who rebound more quickly tend to have a few things in common, including a clear financial and personal plan and a realistic, positive attitude. It is important for those who have filed for bankruptcy to learn as much as possible from the experience. One of the biggest mistakes a person can make if the financial situation was caused by consumer debt is going back to old spending habits and piling up debt after resolving a bankruptcy filing.
Budgeting, creating specific goals and focusing on rebuilding credit are all good practices following a bankruptcy. Data clearly shows that those who rebuild their credit scores can see similar mortgage APRs to those who have never filed for bankruptcy as early as three years after filing. Those looking to file for personal bankruptcy in New Jersey should start by speaking with a lawyer who is experienced in handling these processes.
Source: thestreet.com, "Bouncing Back From Bankruptcy", Brian O'Connell, May 8, 2018