Securing Your Future After Filing for Bankruptcy in Arizona
Our experienced Tucson bankruptcy attorney, Eric Ollason, knows the circumstances that lead individuals to pursue a bankruptcy in Arizona are often out of their control. We also know they result in immense financial pressure and overwhelming anxiety that is difficult to cope with — until you have a solution in place.
While Chapter 13 and Chapter 7 bankruptcies are both viable financial relief options for most, there is life after the case has been discharged. When you are ready to start your new financial life, you should do so securely by learning from the past.
Here are a few ways to achieve financial stability and future success after bankruptcy.
How Long Does an Arizona Bankruptcy Stay on Your Credit Report?
Chances are, before you filed for bankruptcy, your credit score may have been less than stable. After filing for bankruptcy, be prepared for it to take a secondary and significant hit.
A Chapter 7 bankruptcy can stay on your credit report for up to ten years from the date the bankruptcy was filed, while a Chapter 13 bankruptcy will fall off your report seven years after the filing date.
However, you will not have to wait that long to begin reestablishing better credit. This is where learning from the past really counts.
Get Back on Your Feet By Preparing a Budget
First, there is no shame in filing for bankruptcy. It is a process that requires partnering with an experienced Arizona bankruptcy attorney who can help you make informed decisions about your current and future financial standing.
If you are considering bankruptcy, know you are not alone.
According to the U.S. Courts, annual bankruptcy filings in the calendar year 2021 totaled 413,616.
Instead of feeling guilty or ashamed about your decision, learn from the past and resolve to move forward by preparing a realistic budget you can stick to.
Outline your living expenses and income and determine where you can cut back and potentially begin saving money. Keep in mind, vowing to save half of your paycheck each pay period is probably not a realistic approach, which means you may abandon the practice rather quickly. Instead, simply take an honest look at your expenses, and develop a sensible approach to cutting back.
For fixed expenses, like utilities, insurance, or vehicle payments, set up an automated payment program for each, so you can avoid late payments and fees. Establishing on-time payments translates into credit-building points.
Carefully Consider New Lines of Credit Before Accepting the Terms
The irony of filing for bankruptcy, and receiving a successful discharge, is that you will be flooded with new credit card offers almost immediately after your case is finalized.
The catch is, the interest rates on these cards are astronomical.
This, again, is where learning from the past plays a major role in your future.
It is typically not a good idea to throw yourself back into debt immediately after getting out of it.
We suggest waiting for months before you seek a new credit card, and that when you do, you go to a reputable bank and apply for a secured card.
Secured credit cards operate like a debit card in that you deposit a set amount into a bank account and that becomes your credit limit. Then you charge a small amount each month and pay it off on time.
Once you have done so for around one year, you will have new, positive payment history on your credit report.
Taking the first steps towards financial responsibility will allow you to slowly build your credit, and, over time, create a stable future through lesser debt, and lower interest rates on any debt you do acquire going forward.
Contact Our Skilled Arizona Bankruptcy Attorney Today to Schedule a Free Assessment
If you have questions about how filing for bankruptcy in Arizona can give you a fresh financial start, contact our experienced bankruptcy attorney in Pima County, Eric Ollason, to learn more about your legal rights and options by calling (520) 791-2707 to schedule a free consultation today.