Wisconsin Bankruptcy Law

Many of my Wisconsin bankruptcy clients want to know if the process will have a negative impact on their credit scores. Bankruptcy will not really hurt your credit if your credit rating is already not that great when you file.  A better way to view it is that bankruptcy provides you with the opportunity to start rebuilding your credit.  You can regain a better credit score even within a two year period of time!

If your credit rating is decent before you file for bankruptcy, then filing will likely affect your score, but there are two main things to keep in mind in that situation.  The first is that if you are really struggling and have a great credit score, it is likely that you will not be able maintain that rating on your own anyway if you cannot continue to stay current with your bills.  It will only be a matter of time before that score starts going down as the monthly payments you make get harder and harder to manage.  The second thing you should remember is that you can rebuild your credit within two years.  Bankruptcy does not ruin your credit, and we know ways for you to rebuild in the future.

This blog often addresses the events leading up to an individual bankruptcy in Wisconsin or the bankruptcy process itself.  But what about the aftermath?  How do you rebuild your credit rating? It’s impractical to try to pay cash for everything going forward so rebuilding credit is a priority simply to function in the marketplace. Woman’s Personal Finance.net has three tips that may apply regardless of gender.

First, get a secured credit card. The card gets its name because it is secured by a deposit account that is directly linked to it. Your credit limit is usually roughly equivalent to amount of cash that you’ve deposited; the card issuer will tap into this account if the consumer defaults on his or her credit card balance. Secured cards tend to charge higher fees and interest rates that the ordinary credit card, so investigate the card issuer thoroughly to make sure it is a reputable one. Once you establish a track record of paying off your balance on time, you can likely switch over to a regular card.

Second, join a credit union, which is a non-profit equivalent of a bank but owned by its members rather than a bunch of stockholders. Credit unions often have better deals and promotions than traditional banks, such as lower interest rates on small loans that can reestablish your creditworthiness.

Third, although this may not be for everyone, consider joining a support group to remind yourself that you’re hardly the only one trying to restart after a Chapter 7 or Chapter 13 bankruptcy in Milwaukee: “A support group, either live and in person (if available) or via the Internet, is a perfect way to help you deal with what’s going on.”

A qualified legal specialist such as a Wisconsin bankruptcy lawyer can provide advice about post-bankruptcy credit issues as well as responding to any of your other Wisconsin bankruptcy questions.

Assuming that bankruptcy will ruin your credit may prevent you from getting back on terms that you can be happy with.  There are several ways to restore your credit rating after you’ve filed bankruptcy, and they are not difficult.  I’ve been providing Milwaukee bankruptcy services for years now, and part of that is knowing how to reestablish yourself once you’ve finally rid yourself of all of your unsecured debt.

One way to improve your credit rating post bankruptcy is to make sure to pay all of your bills on time.  Pretty self explanatory, isn’t it?  Filing a Chapter 7 bankruptcy in Milwaukee allows you to free up some of the funds once allotted to monthly payments of unsecured debts.  With those freed up funds, get back on top of your bills and stay current with your payments.  This positive reporting plays a large role in a better credit score.

Another recommendation I gave to those that have gotten bankruptcy help in Milwaukee is to obtain a secured credit card after filing.  It important to use this card every month while paying more than the minimum balance, but less than the total amount owed to demonstrate your capability of maintaining your debt responsibly.  The key to this is to show financial responsibility.  Having debt after filing bankruptcy is just a reality, but to improve your credit score, the point is to manage your finances effectively.

Be sure to read the next blog for more information about ways to bounce back after filing.

After filing bankruptcy, my credit won’t be good for 10 years.

While it is true the bankruptcy stays on your credit report for seven to ten years, it is entirely possible to even obtain a mortgage 18 to 24 months after discharge if efforts are made to rebuild credit and keep it clean.  There are different things that a person can do to rebuild credit.  As a bankruptcy lawyer, different companies contact me to let me know that they are willing to work with people after filing.  It is entirely possible to get a car loan with a company that understands your situation, and I know companies that will work with you.  Other things can be done to rebuild credit, too.  For example, getting a secured credit card, using it, and making the payments on time each month is a good way to start.  One should be wary of the annual fees and high interest rates, however.  An installment loan or personal loan that payments are made on time could also help.  Paying off student loans on time is another way to help your credit.  If the efforts are made, credit can be rebuilt in as little as two years.

If I file for bankruptcy, everyone will know.

It is true that bankruptcy filings are a matter of public record.  However, the only people that will know that you filed are the ones you tell.  Your bankruptcy attorney, their staff, court personnel, and your creditors will know, of course.  Bankruptcies are not advertised and your name will not be in the paper.  This is your own business and you can keep it that way.
 
Check back for more myths in the future.  There are plenty of misconceptions that people have about filing bankruptcy, and as a bankruptcy lawyer for the past ten years, I hope to help people see that they are not true.