As an Oakland bankruptcy attorney, I know how difficult the thought of filing bankruptcy can be. For many of my clients, the decision to file bankruptcy comes after years of struggling to repay creditors with money they don’t have. Every month they are forced to rob Peter to pay Paul and are never able to get ahead. By the time they reach my office, most of my clients are emotionally exhausted and ready for a change. However, even after all of that struggle, it still usually takes something drastic to get them through the door. Often times it is the threat of a lawsuit or wage garnishment that forces them to take action and get their finances under control. Once they realize how much bankruptcy can help them, they often wish they had made the decision to file bankruptcy years ago.

So what was holding them back? Well, for many there is a desire to meet their obligations. This is understandable as most people who file for bankruptcy are responsible individuals who for some reason or another, like a medical illness or job loss, could not keep up with their bills. But one thing is true of all of my clients; they are all concerned about how a bankruptcy will affect them in the future. Will they ever be able to get credit again? What about a car loan? Most are sure they will never be eligible for a mortgage loan after filing bankruptcy. Once they find out how quickly they can rebuild their credit they are stunned. A recent New York Times article confirms what I have been telling my clients for years. Bankruptcy is not the end of your financial life, it is a new beginning. It is true that filing for bankruptcy will have a negative effect on your credit score, with credit reporting agencies estimating an average drop of 200 points. But in many cases, people can regain those points and see a rise in the credit score post-bankruptcy. What most people don’t realize is that what lenders find most important is not the fact you filed for bankruptcy, but what you have done with your credit since filing for bankruptcy.

So how can you rebuild your credit after filing for bankruptcy? Well, once you have received a discharge of your debt it is very important to keep up with your other obligations. Always pay your rent and utilities on time. One of the easiest loans to get after filing bankruptcy is a car loan, but only get the loan if you really need the car and can afford to pay it. Paying your car loan on time will help your credit but the interest rate on the vehicle may be very high. You may also try to reestablish credit by procuring a secured credit card. A secured credit card is secured by a cash down payment you leave with the bank. The bank holds on to this cash and if you fail to make your payments, they use the cash to offset the debt. It is usually advisable to wait a few months after you have received your bankruptcy discharge to apply for a secured credit card, as it can take some time for the bankruptcy to show up on your credit report.

Once you get the secured card, use it. But make sure you pay off the balance every month in full. And never be late on your payments. If you do these things, you will see your credit score rise. As the Times article states, if you have rebuilt your credit after bankruptcy and have the sufficient income, you may be eligible for a home loan in as little as two years.

If you are ready to restart your financial life, contact an experienced bankruptcy attorney today. And remember, filing for bankruptcy might just be the best thing you can do for yourself.

The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code