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Bankruptcy does not mean that the credit score cannot be repaired

About 500,000 Americans file for personal bankruptcy relief each year, including a fair share here in Florida. With overwhelming credit card debt and medical bills, they take advantage of the one remedy that does not require a payment plan. The Chapter 7 Bankruptcy may be a dramatic help to those with heaping amounts of unsecured debt because the debt is erased permanently and quickly in the proceeding.

The one drawback, however, that many express about this powerful remedy is the negative effect that it has on one's credit score. A bankruptcy will make one's score plunge after the papers are filed. However, the plummet may be not so great if the consumer already is plagued by charge-offs and defaulted credit card accounts. At that point, there is nowhere to go but up.

A concerted effort must be waged by individuals and married couples who want to increase their credit standing after a bankruptcy. They got the "fresh start" promised by the bankruptcy laws, but that fresh start is not totally fresh when bad credit remains an impediment. At the same time, the consumer must learn to spend wisely the next time around, and to exert reasonable control over all credit extensions received.

Florida residents exiting from a bankruptcy may repair their credit by starting or continuing to pay several accounts meticulously on time. If one has a car loan or mortgage loan still being paid after the bankruptcy, these must be paid on time and in full every month. After 12 to 24 months, those payments will have a powerful impact on bringing the credit score back up. In addition, secured credit cards after bankruptcy are popular tools to get the points back up. Everything that a person can do to start a normal pattern of credit payments will enhance and restore the credit score going forward.

Source:, "How to Rebuild Credit After Bankruptcy", Maurie Backman, Dec. 22, 2017

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