Arizona residents may have heard countless times about the potential damage that declaring bankruptcy can do to a person's credit report and score. This may be one of the reasons that people facing financial difficulties are reluctant to file for the protection bankruptcy has to offer. However, they should rest assured that it is possible to rebuild credit after declaring bankruptcy, as long as they differentiate between the right way to do so and the wrong way to do so.
According to a representative of the National Foundation for Credit Counseling, the first thing Arizona residents should do is go over their credit report, which they can obtain from free from various institutions. They should check if they have any outstanding debts and clear those.
By creating a budget and allocating money for various expenses, including creating an emergency fund that totals at least one month's salary, Arizona residents recovering from bankruptcy can ensure that they do not flounder when they encounter further financial difficulties.
It is also possible to apply for a credit card, as long debtors apply for one that fits their financial situation. According to the representative, it is better to apply for a secured credit card that has low fees and reports to the credit bureau, thus allowing the former debtor to make payments responsibly on time and build up credit.
It is scary starting over, but Arizona residents should not despair, as there is definitely hope at the end of the tunnel. The financial freedom that many find with declaring bankruptcy, whether Chapter 7 or 13, is immense and can allow Arizona residents the ability to restart their financial life anew.
Source: USA Today, "Personal finance: re-establish credit after bankruptcy," Robert Powell