Nearly 800,000 people filed for bankruptcy in the United States last year. Several counties in Florida made the top 100 areas for the highest incidence of bankruptcy, including Miami-Dade County, which saw more than 400 personal filings per 100,000 people from April 2015 to March 2016.
Chapter 7 is often the most preferred method of filing because it involves no repayment of debt and in states like Florida, exemption laws can be used to benefit and retain property throughout the filing process. In fact, Florida has one of the most generous homestead exemptions in the country. You can exempt an unlimited amount of value in your home or other property covered by the homestead exemption.
It is important consumers know that immediately after filing for bankruptcy they can begin improving their credit score. Here are seven steps you can take to begin rebuilding your credit after filing for bankruptcy.
- Know your credit score. Go to annualcreditreport.com and pull your three credit reports (Experian, Equifax and TransUnion). Make sure all of the debts affected by the bankruptcy are listed. Also confirm all information is accurate on each of the reports.
- Pay bills on time and in full. Raising your credit score after bankruptcy is all about getting back to basics. Set calendar reminders or set bills on auto-pay so you are not late on a payment. Do not spend more than you can afford each month and pay your cards off in full so you do not incur any interest charges.
- Open a new bank account. When you open a new checking or savings account you are demonstrating financial stability. This can also provide you with a clean slate to practice good financial habits.
- Apply for a secured credit card. These cards are one of the easiest ways to build credit and improve your credit score. Secured credit cards borrow money against a deposit the consumer has already made. Compare interest rates and select a card with the best rate and low annual fee.
- Create and stick to a budget. This should be based on your income minus expenses for rent, utilities, groceries and other expenses. Creating a budget will help you stay on track when it comes to your finances.
- Start a savings account. Having an emergency savings means you will be less likely to have to access credit when an unexpected expense occurs. Research shows that having as little as $250 saved up for an unexpected expense can protect you from having to resort to pay day loans and credit cards.
- Be patient with yourself. If you made mistakes, learn from them. You should not feel ashamed after filing for bankruptcy. The more active of a role you take in rebuilding your credit, the sooner you can bounce back after bankruptcy.
If you are in a financial crisis and are considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
