With the current prolonged recession, the number of bankruptcy filings continue to grow at an exponential rate up almost 27% for the fiscal year ending in March 2010. Over 1.5 million people seek bankruptcy relief and that number will continue to grow as the U.S. continues to experience record unemployment, a lack of economic growth, and an unprecedented number of home foreclosures. Many people still mistakenly view bankruptcy as an option to be avoided even though it often provides a "fresh start" for overextended debtors facing staggering financial challenges.
Many consumers have no idea how to begin rebuilding their financial life following this fresh start. Kansas bankruptcy attorney Rick Hodge is a life long native of the state and has assisted many consumers faced with overwhelming and daunting financial burdens. People often find themselves facing bankruptcy for reasons completely beyond their control, including layoffs resulting from the downturn in the economy or serious catastrophic medical or health conditions (just to name a couple examples). One of the most frequently asked questions by those who have filed bankruptcy is how do I rebuild my economic life.
The good news is that it has become much easier to rebuild one's credit in recent years than it was ten to fifteen years ago. A person or couple who has received a Chapter 7 bankruptcy discharge, can typically improve their credit score within six months to a year. Many lenders only look to a prospective borrower's credit score as opposed to specific blemishes on a person's credit report. In the past, lenders had their own system for scoring credit records which often precluded someone with a bankruptcy from obtaining credit. There are also indications that even if a lender does look at a bankruptcy that the significance of the bankruptcy decreases over time.
An important step in rebuilding ones credit after a bankruptcy is to be vigilant about the accuracy of ones credit report. Anyone who has received a bankruptcy discharge should contact the three major credit reporting bureaus Experian, TransUnion and Equifax and obtain copies of ones credit report. Creditors will not typically bother to report that a debt has been "included in BK." This designation is important because the debt is not part of a consumer's existing debt in a debt to income ratio calculation. It is much better to show a balance was discharged in bankruptcy then an outstanding balance AND a bankruptcy. It is important to periodically review ones credit report to make sure the report is accurate and dispute any items that should not be present.
Another important positive approach to reestablishing credit following a bankruptcy is to obtain a secured credit card that will report the balance and payments to the credit bureaus. Secured credit cards typically require a deposit or use ones bank account as collateral. To avoid ending up back in the same dilemma, it is a good idea to be very careful about accruing new debt and to be meticulous about making payments in a timely fashion. Many financial institutions that offer secured credit cards provide the option to have the card become unsecured after a period of time.
Someone who has filed bankruptcy, may be eligible for a home loan within one or two years of the discharge. The Fair Housing Administration (FHA) insures mortgages two years after a Chapter 7 bankruptcy discharge if one has established good credit or avoided incurring new debt and has shown the ability to manage ones financial affairs. Within seven years, the items on a persons credit report that were marked "included in BK" will be removed while the entire bankruptcy will be removed within seven to ten years depending on the bankruptcy chapter that was used. Attorney Rick Hodge is available to provide guidance on whether bankruptcy is an appropriate option for you as well as answer all of your questions regarding Kansas bankruptcy law and rebuilding your financial security following a Kansas bankruptcy.
Contact the firm today to discuss your options.