After a bankruptcy has been discharged

Some Arizona residents struggling with their finances may be hesitant to make the decision to declare personal bankruptcy, even though they are aware of the potential benefits of bankruptcy in termsthe form of their ability to wipeing out most bills, ending creditor harassment and even halting foreclosure proceedings. Many people may fear that after filing for bankruptcy, whether it is under Chapter 7 or 13, they will be unable to rebuild their financial lives. However, they may not be aware that bankruptcy this step is just the first step in starting afresh financially.

The first thing Arizona residents should do after the court grants them a discharge ins their bankruptcy is to reestablish a relationship with a bank. After comparing bank fees and determining what type of account suits them, filers should select a local bank or credit union in order to open a checking or saving account. After depositing money in the account, it is possible to obtain a secured credit card. Even though it is very similar to a debit card, it differs in that its activity is reported to credit bureaus and helps create a credit history. It slowly becomes possible to obtain store and gasoline cards after holding a secured credit card for some time.

Most importantly, filers should remember to pay their bills on time. This also helps build one's credit score, and all of this can help when filers consider buying a house in the future. According to the National Association of Realtors, two years after bankruptcy has been discharged is the best time to apply for a mortgage. In fact, the better the credit score, the lower the interest rate will be and therefore the lower the monthly payments will be.

As Arizona residents walk the path of financial recovery, they should consider what it is that led to their bankruptcy in the first place and try to change financial patterns. Sometimes, the causes can be unexpected, such as getting laid off or suffering from an illness, and nothing can be done to avoid them. For these reasons, the option of Chapter 7 or 13 bankruptcies should be considered, given that it is an option forpossible to starting over after a bankruptcy discharge is grantedthem.

Source: Consumer Affairs, "Starting over after bankruptcy," Mark Huffman, May 17, 2013