If you are like a lot of people who live in Kentucky and are struggling to make ends meet, you may have given consideration to filing for bankruptcy. However, you may also be concerned about the long-term impact of a bankruptcy on your credit report. The reality of the matter is that a Chapter 7 bankruptcy has the ability to clear your current debt and give you the chance you deserve to build a strong credit score.
As explained by NerdWallet, one of the benefits of a Chapter 7 bankruptcy is that your debt-to-income ratio will immediately improve once your debts are discharged via the bankruptcy. This alone generally gives consumers a boost in their credit score which often suffers as debt amasses and accounts become past due.
After a bankruptcy discharge, you should secure strategic credit accounts, such as a vehicle loan or even a secured credit card, and ensure you make regular payments. For any credit card, paying off your balance in full every month is one of the best ways to show lenders that you have the ability to responsibly use credit. Over time, you may be able to qualify for an unsecured credit card and, eventually, you will qualify for cards with lower interest rates that you would get initially out of bankruptcy.
This information is not intended to provide legal advice but is instead meant to give residents in Kentucky some tips on how they can leverage a bankruptcy as a way to get a true fresh start and create a healthy, positive financial life.