Lefkovitz & Lefkovitz
Nashville Office
615-686-2279
Cookeville Office
931-528-5297
We help individuals and businesses find the right solution to their money problems.

How credit can be rebuilt after declaring bankruptcy

Tennessee consumers can take steps to improve their credit after a bankruptcy even though it will stay on the credit record for several years. The first step is to make a budget. This will help a person pay bills on time, and 35 percent of a FICO score is based on when payments are made. A budget should also allow a person to put money away into an emergency fund. About 10 percent of people who declare bankruptcy go on to do so a second time, and this emergency fund may provide the cushion needed to keep a person from sliding into debt again.

Credit reporting agencies offer a free report each year, and these should be checked annually in case there are any errors. There are also more concrete steps a person can take to rebuild credit. Using a credit card regularly and paying it off demonstrates a person's ability to make payments on time.

Some people are unable to get a credit card after bankruptcy. If this is the case, a secured credit card is another option. People can put a certain amount of money in an account, and this becomes their line of credit. A subprime auto loan is another way people can demonstrate their ability to make regular payments.

Another consideration for people worried about a credit rating is that being consistently behind on bills and defaulting on credit cards will damage their credit as well while bankruptcy offers a fresh financial start. Filing for bankruptcy can put an immediate stop to creditor activity such as foreclosure. With a Chapter 13 bankruptcy, people can work out a plan to pay back creditors over a period of three or five years and keep their assets, including a home.

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Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
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Cookeville Office
312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 615-686-2279
Fax: 931-526-6244
Cookeville Law Office Map