Filing for bankruptcy can be difficult for many South Dakotans. There are plenty of challenges that come with it – even more than the obvious ones. For instance, an individual who files for bankruptcy in South Dakota will likely have some damage to their credit and thus find it difficult thereafter to obtain credit cards, loans, and the like. Fortunately, this damage is temporary, as there are effective ways in which to rebuild credit after filing for bankruptcy.
Know Your Credit Status
Checking your credit report and understanding what is within it, as well as knowing your credit score, is integral to rebuilding credit. Only after you know where you stand can you know what you need to do to rebuild your credit.
You want to check your credit report infrequently, but certainly at the start of building back. A bankruptcy filing will appear on your credit report, although it will eventually be removed: after seven years for a Chapter 13 bankruptcy, and after 10 years for Chapter 7. While it will stick with you for a period of time, bankruptcy is not a permanent ball and chain.
Pay Any Remaining Debts on Time
Bankruptcy proceedings in South Dakota eliminate many types and amounts of debt, but there still may be some debt which remains after the conclusion of the bankruptcy process. If you have debts which must be paid post-bankruptcy, it is critical that you pay them on time and on schedule to ensure your credit improves.
Stay Ahead of Bills and Payments Going Forward
Simple household bills do not remain simple if they go unpaid. If you do not make payments on utilities, they will go to collection agencies which will also affect your credit. That is why it’s important to remain in good standing with any payments you are required to make.
Get a Secured Credit Card
It’s not easy to obtain anything on credit post-bankruptcy. However, secured credit cards will likely remain available to you since “you qualify by making a deposit that the creditor can keep if you stop making payments on the account,” as Experian explains.
Ideally, the card you do get will report to one of the major credit services and allow you to convert it to being “unsecured” in time, if it’s paid properly. While fees and interest may be higher with this card, the most important thing is that you pay on time to rebuild your credit, which will also help you avoid said fees and interest.
There is certainly no magic cure for your credit after going through the South Dakota bankruptcy process. Rebuilding does take time. But with the appropriate strategy and consistent effort, you can rebuild your credit and look forward to a more secure financial future.
While this article is intended to simplify common questions about the South Dakota bankruptcy process and rebuilding credit thereafter, bankruptcy has serious legal and financial consequences. There is no substitute for a conversation with an expert. Please contact us today at Thomas A. Blake Law to learn more and let us understand your specific circumstances. We can help you navigate the bankruptcy process and all it entails.