Bankruptcy used to be a big no-no, but now it's pretty common. Without even thinking about it, tens of thousands of Americans face bankruptcy every year.
Why many businesses go bankrupt
There are many things that can cause a business to go bankrupt. It could happen because someone lost their job, got sick, or just didn't have as much money as they used to. People who can't pay their debts are treated fairly by federal laws in the US. People in this situation are given the chance to have their debts erased. But in the end, filing for bankruptcy is not such a good idea. The bankruptcy will stay on the person's credit report for as long as ten years. And all the bills that are no longer due because of the bankruptcy are added to the income that is taxed.
Even though it is usually hard for someone who has gone bankrupt to get another loan, some credit card companies will give them charge cards. Every lender looks at how you've paid your bills in the past and won't give you money if you already have a lot of debt. In reality, credit card companies don't have much to lose by giving credit to someone who just went bankrupt. The reason for this is that once a person has filed for bankruptcy, they can't file again for another eight years. Even the credit that is given will have a higher interest rate because the credit card company will be taking on a lot of risk. But the main point is that you can still get credit after you file for bankruptcy.
How to raise your credit score
A better plan would be to improve your credit score so you can get a bigger loan. Some ways to do this are listed below:
Try to get a card that gives you more credit. With your bankruptcy, it won't be easy to do, but you should know that big banks also have more power over credit rating companies. Smaller banks are more likely to give you a credit card with a high interest rate, but that won't help your credit score as much as a card from a big bank. For example, having an account at Citibank can help your score more than an account at a bank with less trust. Bigger credit bureaus can offer better deals and better services, and they can also help you keep your good name in the market.
Once you get a major card, be very careful with how you use it. If you have trouble making payments on this card, you may have lost your last chance. Try to pay the full amount at the end of the month. This will keep you from having to pay high interest. Also, keep your card active by making purchases regularly and paying for them in full at the end of each month.
The best thing to do is to spend as little as possible of your total credit limit. Keeping your debts low will improve the ratio between what you can spend and what you have available. So, it's smart to keep high-limit credit cards on you at all times and spend as little as possible from them. If you have two $5 cards, each with a $1,000 limit, that gives you a total limit of $5,000. If you've already spent $2500, ask the other cards to raise your credit limit so that the amount you've spent compared to the amount you have available goes down. Find out more about instant credit reports at http://www.creditscorereportguide.org/Free Credit Report Online.
Personal bankruptcy is a very sad thing for anyone to go through. But more important than that is figuring out how to stop the bankruptcy from hurting people's lives. You can get out of trouble if you spend a lot of time and work on it. You just need to know how to do it. If you have a good guide, nothing like that should happen. You should hire a consulting firm to help you with this. It might cost you a few dollars, but the problem will be solved.
It's not easy to get back on your feet after filing for bankruptcy, but it's certainly not impossible. It can be hard to get back on your feet after going bankrupt, but it is possible. What you can do is set yourself up again and slowly become a more trustworthy person.
