Bankruptcy goes on your credit report and stays there for seven years, but that does not mean that you will never have good credit.  It will be very difficult, if not impossible, to obtain any new credit cards (your old ones will be cancelled) and it will become harder to rent or buy a place to live.  In some cases, bankruptcy may also make it more difficult to find a job because many employers check the credit reports of their prospective employees.

To help minimize the effects of bankruptcy, you need to be sure you have a reliable place to live and be sure you have a secure job at least for the foreseeable future.  Immediately following your bankruptcy, you need to begin living within your means.  Learn to live on a budget and monitor your spending.  Pay your bills in full and on time, especially if you have a home mortgage.  To begin rebuilding your good credit, check into a secured credit card that requires you to deposit money in advance.

Click here for a “Building Good Credit” Checklist

Bankruptcy is a fresh start.  Let go of your guilt and shame and focus on a more solid financial future:

      • Evaluate your spending habits.  If you’re not sure how you ended up in a bad financial situation, you’re likely to find yourself there again. Recognize what habits need changing.
      • Pay your bills timely. Your credit score will already be negatively impacted by your bankruptcy, and establishing a new pattern of timely payments is important.
      • Monitor your credit report. While you’re working hard to improve your credit, it’s important to make sure the information is current and accurate.
      • Avoid credit repair scams. The only way to improve your credit is to improve your financial habits. No one can legally remove accurate information, but you can correct inaccurate information yourself – for free.
      • Create a budget. Adopt a no-frills lifestyle.
      • Look for a credit card that will help rebuild your credit, such as a secured credit card. Use it minimally and pay it off each month.
      • Open a savings account.
      • Don’t be afraid to seek help.