Residents of Outagamie County, Wisconsin, will agree that debt can impact a person and his or her family emotionally, socially and professionally. If debt is not handled properly and timely, a person can face severe economic roadblocks securing credit in the future.
There are provisions under both federal and state laws to get out of debt and to start a fresh financial life. Federal provisions provide debt relief under Chapter 7 for simple bankruptcy or Chapter 13 for a debt repayment plan. Wisconsin residents have another state bankruptcy option in filing for bankruptcy under Chapter 128, in which a debtor is allowed to repay debts pursuant to a three-year payment plan.
However, just filing for bankruptcy and receiving a discharge may not be enough for a debtor to have hassle-free access to credit in the future. It is a good idea for a debtor to follow few credit tips after filing for bankruptcy and receiving a discharge. Doing so can help a debtor monitor his or her credit report and ensure that his or debt accounts are paid. It also will help a debtor handle financial matters in a better and avoid past financial mistakes. These steps should include:
- Collect and preserve all paperwork relating to the bankruptcy filing case – for future new credit, a lender may wish to see a copy of bankruptcy papers that have all the detailed financial information for considering new credit. The petition, notice of filing and discharge are the most important documents.
- Check credit reports regularly – to make sure that all financial information is being reported to the credit rating agencies and to ensure that there is no outstanding debts and that all of the debtor’s account shows a zero balance.
- Start a budget and review it regularly – to ensure that the debtor does not find himself or herself in that financial hole again.
- Start an emergency fund – to ensure that there are funds for unforeseeable emergencies and to avoid incurring unplanned debt.
- Think about new credit – there is a difference between good credit and a heavy debt load and a debtor should avoid getting new credit right away. Instead, he or she should rebuild credit by controlling his or her budget and saving some money.
Source: Credit.com, “5 Things to Do After Bankruptcy,” Gene Melchionne, Dec. 8, 2014