Bouncing Back From An Illinois Bankruptcy
Nationwide, bankruptcy filing rates are at their highest level since 2006. In the wake of the 2005 bankruptcy reforms, credit card companies tried to scare people away from bankruptcy. That strategy worked, for a while. Moreover, during the Great Recession, many banks tightened their lending requirements and medical providers tried to keep prices low.
Now, Chicagoans see bankruptcy as a legitimate debt relief option, especially since the Supreme Court has repeatedly watered down the Fair Debt Collection Practices Act. Moreover, banks are once again issuing credit cards in large numbers and medical inflation is creeping back up.
More filings mean that more people need to recover from bankruptcy. Since the process is designed to give debtors fresh starts, they usually only need a gentle push in the right direction.
Remain Current on Current Obligations in Illinois
Now that we are in the summer of 2018, almost nobody cares what happened in the waning days of the George W. Bush administration. Even political junkies really only care about what’s happening in the Donald Trump administration.
Illinois bankers are the same way. Technically, bankruptcies remain on credit reports for either seven or ten years. But bankers do not particularly care about financial problems you had a decade ago. They understand that such issues have little, if anything, to do with your current financial status.
So, try your best never to let any accounts go to collections or go more than 60 days past due. If the account goes to a third-party debt buyer, that indicates the consumer did not care anything about paying the bill. Moreover, many lenders equate 90-day delinquencies with pre-foreclosure or pre-repossession.
Be proactive with delinquent consumer accounts. If you get a “last chance” letter, try to settle the debt for less than the face amount. As for secured debts, such as your home mortgage, try to build a reserve. With such a cushion, the lender may tack a delinquent payment onto the end of the note or there may be enough to enable you to skip a payment altogether.
Nevertheless, be upfront with lenders about your bankruptcy filing. Tell them about it before they run your credit history. As long as you have a good explanation for what happened and you have been reasonably current since then, most lenders will look past your bankruptcy.
Responsibly Use Credit
Paying current obligations is one way to raise a credit score. Borrowing money, and repaying it on time, is another way. That activity shows would-be lenders that others consider you a good credit risk. It also shows that their faith in you is well-placed.
Most people receive numerous credit card offers after they emerge from bankruptcy. Moneylenders know that these individuals cannot obtain another discharge for several years. Take advantage of the situation and obtain a card or two. Charge something on it every month, and pay more than the minimum each month.
Rely On Experienced Lawyers
It’s up to you to maximize your fresh start. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.