Life After Filing for Bankruptcy.

Updated on March 28, 2008
S.T. asks from Odenton, MD
19 answers

Many blessings to you all,

My husband and I recently filed for bankruptcy due an
enormous amount of medical bills. I was wondering if
anyone has any advice a/o experience with the do's and
don'ts when rebuilding your credit?

Thanks for taking to write.

1 mom found this helpful

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J.K.

answers from Washington DC on

This is a non- biased honest way to find out about credit.

http://www.myfico.com/CreditEducation/

Good luck!
It does get better!

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N.B.

answers from Washington DC on

Hi, S. T - I would recommend reading Dave Ramsey's book, "The Total Money Makeover." Good luck. You can do it! N. B.

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K.D.

answers from Washington DC on

Hi there...I know what you're going through...try the website www.itpaystosave.com It can be a tremendous help to organize your finances and start rebuilding your credit...good luck!

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D.N.

answers from Richmond on

Hi I would encourage you to google Dave Ramsey and find his web site.
I listen to him on the radio and he has helped a lot of people rebuild scripturally.

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H.S.

answers from Washington DC on

T, there is life after bankruptcy. After you have received your declaration or release, you should begin again building your credit. First go to your credit reports and dispute any and ALL things on ALL 3 reports. Get that process going NOW! And keep on top of the disputes. There is a company called Lexington Law, who can help you with this if you don't feel comfortable doing it yourself. They are an excellent source of help. Apply for a credit card from ORCHARD MASTER CARD. They have the best rates and don't gouge you. You may have to pay a fee of $50 which will be your first months bill. But keep your balance always low so you can pay it off every month. Every time you pay off a credit card, your credit score goes up a point or 2. Over time you will see a higher score. If you want, feel free to email me at [email protected]____.com. There is a lot you can do to help yourself, including getting your landlord to put your lease agreement on a report. This will be a good reference in the future when you are planning to purchase your very own home. Good luck to you. H

1 mom found this helpful
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J.G.

answers from Charlottesville on

I'm the oldest of 7 children and my dad owned his own business. It was always very tough financially for us and I remember getting to the point of bankruptcy. Years later, we have since found Dave Ramsey. We all say that we wish we would've known about him before. He has been our "financial advisor" for the past several years and is WONDERFUL! He has a radio program and is also on FOX News. Check out his website: www.daveramsey.com. Best wishes!

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C.W.

answers from Washington DC on

I really feel for you and your family. When I was 12, my dad was laid off from his job at the steel mill - where he thought he was going to retire from. We lost our medical insurance and since my mom was an insulin-dependant diabetic, this wasn't a good thing. We managed for a while, until my mom was hospitalized. The medical bills put things over the edge and my parents filed bankruptcy. We lost our house. I still have dreams about that house (I'm in my mid 30's now). It was close to 20 years before my parents bought another home. I don't really have any great advice, except that (1) there is life after bankrupcy and (2) it's a slow process, but you'll get there. After a few years, my parents got pre-paid credit cards or credit at places like Sears - and you just start small and build. You might call one of those consumer credit places for some advice.

My family is in a bad financial position right now, teetering on the edge of forclosure due to my husband's job loss and not being able to sell our home in Ohio. We moved to VA to get him a job, but that house is the bane of my existance. One silver lining - children are relatively unphased by the financial problems of parents. I was sad when we had to move from our house, but we always had food on the table and I thought counting pennies (literally) was normal. Hang in there. You're not alone.
-CW (mother of two)

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S.M.

answers from Washington DC on

I had a BK back in 1989 and it took 10 full years before it was totally off my record. However - you only need wait 2 years to be able to buy a house. What I did in the meantime was get a secured credit card - you can only use up to the value that you have in your bank's credit card account. But it's a way to get credit again. BUT NOT TO USE - just to re-establish a positive credit history. Pay on time. Follow Susy Orman and Dave Ramsey. And if you haven't had your court date yet to actually complete the Bancruptcy process and it is primarily medical debt. Go to the medical providers involved and ask if they have a Patient Assistance Program. We just had our financial situation change becasue of our job change and move and after our insurance paid what it would and we made payments for a year - our income reduced to 1/2. We processed the forms for assistance with our tax return (required) and we qualified for 100% assistance ($5,500 write off). If you haven't been to court yet - try speaking to the medical creditors where the accounts originated. Some of my stuff had already gone into collection. They have pulled it back and not hurt my credit. My re-established credit is Excellent +. It is possible. But it must change the way you work with your money.

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M.S.

answers from Richmond on

My husband and I filed bankruptcy 6 yrs ago. Since then we have rebuilt our credit. We have purchased a house, automobiles and we have a credit card. It does take time.

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A.H.

answers from Norfolk on

Check out the forums on myfico.com.

The forums there are wonderful, and have helped me tremendously. After being discharged at the beginning of 2006, our credit scores were going nowhere fast. Namely meaning we couldn't get our scores up to save our lives. In the last 6 months since I've begun learning about credit from those forums, our scores have raised 100+ points. I wish I had known about them sooner!

D.S.

answers from Norfolk on

Hi S. T.

Get a cheap apartment or house to rent that is in a safe place. It is okay to rent. In your state of affairs, you will have to build your credit back of slowly.

Our society teaches that we must have everything right now. Unfortunately, life does not hand us everything we want right away.

I know it is difficult to start over at 35 but you are still young and you can do it. Your main goal is to love each other and have things that you can afford. You want to be responsible and accountable for the way that you live regardless of what everyone else has. Self-control or self discipline is a virtue. Good luck and God Bless you and your family. D.

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C.N.

answers from Washington DC on

I just want to let you know that there is life after bankruptcy. I had to file back in 2003 because I had co-signed for a car for my husband. He began using drugs and I could not pay my car note and his. I filed and at first thought it was the most so terrible. One of my creditors came to my hearing and offered to keep me because up until the bankruptcy I was current in my payments and I explained that I had come into hard times with bills that my husband and I had together but I was left to bear the burden. After 2 years I was discharged and people began to approve me for cars with low interest rates, credit cards, etc. When you have to do something that you would rather not and not because you are trying to avoid something the only thing you can do is learn from what caused you to have to file bankruptcy in the first place. Begin the change whatever spending habits that brought you to that place and DISCIPLINE yourselves concerning your finances. Look for free classes to help you with your finances and READ because KNOWLEDGE is POWER.

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C.G.

answers from Washington DC on

My advice to you is debit card, debit card, debit card!! My husband and I filed for bankruptcy over 10 years ago and believe me it is a humbling but learning experience but can be overcome. Having a debit card helps tremendously because we found that without having credit, especially credit cards, we practically did not exist in the world. We couldn't rent cars, reserve hotel rooms, and once in the hotel they locked the mini bar and took away the phone (actually happened). With the debit card we had the "Visa" logo but could only spend what money we actually had in the bank. Life does get better. Within a couple of years we learned to buy ONLY what we could afford with the debit card and learned the difference between wants and needs. We needed a larger down payment for a home and a lot more scrutiny from the lenders but we did buy a home! It will all start to come back together for you. Hang in there!!!!

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M.S.

answers from Washington DC on

When starting over from bankruptcy you will need to be conscientious about paying your bills on or before time. Even if you pay the minimum amount required. Lenders will be looking for on time payments.

If you decide to apply for credit as some suggest as a means of rebuilding, note that your interest rates will be high and this is okay, because you are rebuilding. The most important thing is that you pay on time. If you currently own a vehicle that you are paying for, please pay it on time. Also note that certain utility companies now report late payments to the credit bureaus, i.e. verizon.

If you and your husband are now able to save money, by all means please do so, as this will aid you in your dream to own a home.

When you are ready to pursue your dream of homeownership, as a realtor, I would love the opportunity to represent you and your husband. We currently respent buyers in MD, DC and VA.

C.O.

answers from Washington DC on

T:

Hello and blessings to you as well.

I wouldn't worry about rebuilding your credit. Use cash for everything. It was a VERY hard choice for my husband and I to make, but I can honestly say it was the best.

We haven't filed for bankruptcy - but we were close.

I realize you want to buy a house one day. You can talk with lenders when you are ready to do this and ask how they will deal with your bankruptcy and if you chose to go the cash only route. Many banks will tell you that you HAVE to have a credit card in order to buy a home. You don't. A stable job and long-term checking account without any bounced checks is something they will look at as well.

It is hard going to the cash only route, however, I don't worry about collection calls and what bill I'll find in the mail anymore. That's the problem with credit cards - we had one card so long (since 1986) that our limit was well over $20K and it was EASY to go shopping and use it. In one month I managed to charge over $4K and was SHOCKED because I was irresponsible and didn't keep track of what I spent during the month.

Don't be duped in to thinking you MUST have credit cards in order to build your credit or buy a home. You can do that with car payments and keeping a positive balance in your checking account every month. Job stability counts too.

I will keep you in my prayers. Good luck!

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L.S.

answers from Washington DC on

I had to do the same thing after 9/11. It's a hard time, but you will get through it. All I can recommend is that you make sure that you pay your bills on time and save, save, save. It's a hard time to buy a house right now, banks aren't looking to lend to people with less than perfect credit. But the more you can put down on a house, the better your chances. Keep the faith and remember that this too shall pass. As long as you have your family around you, you have a home. Even if it belongs to someone else. Hang in there!

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S.G.

answers from Washington DC on

Hi, my name is S....We too had to file BK back in '04...unfortunate circumstances (non paying renters..crooked boss, etc) my husband who had exceptional credit took it very hard..blamed me, etc..I can tell you the only thing you can do is wait.. pay everything on time..if you were allowed to keep a car w/ payments thats great becauase that will help re-establish your credit...alot of places will give you credit soon after BK because they know you cant file again for 7 years...be very careful, they also charge an enormous amount of interest...it's a route but make sure u make your payments ON TIME or interest will go through the roof and keep it minimal...we bought a house using a subprime lenderat 8.25% and w/ interest rates so low we cant refinance because most A list lenders want 5 years after BK...we have just passed the 3 yr after DISCHARGE date( A very important differance then file date) good luck to you if you have any other questions feel free to email me [email protected]____.com

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B.B.

answers from Washington DC on

Don't get any more credit cards. A lot of companies will want to give them to you and really high rates. They know you will be liable for them because you already did the bankruptcy thing and can't do it again. Same thing with car loan places.
Just don't apply or accept for any credit cards. Trust me - I screwed up and signed up for what was sent to me and was practically back in the same position before I started.

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E.K.

answers from Washington DC on

I symapthize. After my DH and I filed, we started getting MANY offers to rebuild our credit. DON'T do it until you have savings built back up!

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