How Illinois Consumers Can Rebuild their Credit after Chapter 7 Bankruptcy

Illinois consumers who file Chapter 7 bankruptcy can rebuild their credit over time, and checking their credit reports is the best way to start.

Illinois Chapter 7 bankruptcy filers may worry that declaring bankruptcy will destroy their credit forever. However, while bankruptcy (BK) does significantly damage most credit scores, it won’t permanently ruin your credit. In fact, a lot of Chapter 7 filers experience a sense of relief after receiving their discharge papers. Even though they’re stuck with the BK on their credit reports for a while (7 to 10 years), most or all of their debts are wiped away, and they have a chance to make a fresh start. Of course, Illinois consumers with a good plan can fix bad credit faster. Also, because credit report errors are more common among BK filers, keeping tabs on credit reports is crucial.

Five Recovery Tips for Chapter 7 Bankruptcy Filers in Illinois

Of course, you won’t have completely clear credit until after your Chapter 7 bankruptcy expires and falls off your credit reports. Yet, you can take some major steps toward credit recovery right away. In fact, before your BK disappears, you might have what is considered a good credit score. At any rate, these five actions will help you rebuild good credit and never look back.

1 – Check your credit reports.

Absolutely every Chapter 7 bankruptcy filer must check their credit reports after discharge. This is because discharged debt is often reported incorrectly. Sometimes by mistake, but often on purpose, creditors continue to report discharged debt as delinquent or unpaid. If this happens, your credit score takes a heavier hit. It may also make it harder to get new loans or credit in the future.

After looking over your credit reports from TransUnion, Equifax, and Experian, if you discover that any discharged items are inaccurately reported, call Credit Repair Lawyers of America. We offer free, legal credit repair to Illinois BK filers, and our credit repair attorneys are experienced in post-BK credit report cleanup.

2 – Create a realistic budget.

Creating and sticking to a budget is one of the best ways to avoid financial trouble in the future. Then, later on, when you start using credit again, your budgeting strategy will guard you against overspending and credit card abuse.

3 – Seek credit counseling.

For Illinois consumers who struggle with budgets, credit counseling is available. It’s likely that you received some pre-discharge credit counseling, but it’s understandable if you need more help. Now is definitely the time to reach out and get a good game plan in order for your post-BK life. If you need assistance in finding a non-profit credit counseling service, ask your bankruptcy attorney. Luckily, most BK lawyers know reputable credit counselors.

4 – Build an emergency fund.

The more money you have in savings, the more insurance you have against unexpected expenses. Sadly, too many Illinois consumers have seen their credit repair efforts destroyed by one unplanned financial event. Therefore, you should factor your savings into your monthly budget.

5 – Engage in light credit use.

A lot of Illinois bankruptcy filers receive loan and credit card offers immediately after  discharge. These offers pour in because lenders and credit card issuers know that post-BK consumers are likely looking for credit. They also know that, after receiving your discharge papers, you can’t file another Chapter 7 bankruptcy for eight years.

Before applying for any new credit after bankruptcy, you should stop and think about your needs and goals. For most consumers, there are three reasons not to jump headfirst into debt immediately after BK. First, it looks bad on your credit reports. After all, you’ve just had a big chunk of debt wiped away. Why are you building a mountain of new debt so soon? Second, you are in a position where you need to prove yourself. So, taking on more debt than you can potentially handle means possibly setting yourself up for failure. Finally, post-bankruptcy loans and credit cards come with high interest rates. Therefore, you should only use what you need to start rebuilding your credit.

The Free and Legal Way to Get Better Credit after Chapter 7 Bankruptcy

Don’t let post-bankruptcy errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (773) 360-0665 or sending him a message through our contact page.