No one likes the thought of filing Chapter 7 bankruptcy in California, but sometimes, filing is the only way to get relief from overwhelming debt. If you filed Chapter 7 recently, you may wonder what happens after discharge. While life after Chapter 7 is often difficult, you can still recover.
Monitor credit scores
A Chapter 7 discharge commonly remains on your credit report for 10 years. You should monitor your credit starting about 90 to 120 days after the discharge so that the credit bureaus have time to update.
You are entitled to one free report from each credit reporting bureau once annually by law. If you find an error, such as an account not discharged that should be, you can file a dispute.
Pay debts
You should pay your bills on time and the debts not discharged in bankruptcy to avoid damaging your credit further. Not all unsecured debts get discharged in bankruptcy, which includes current taxes and domestic obligations.
Make a budget and abide by it to determine ways to reduce spending, which may have been covered in your credit counseling. You can also base a budget on case forms Schedule I and Schedule J.
Rebuild credit
It is commonly believed that bankruptcy keeps you from getting a loan, but you can. However, it takes time to rebuild credit, and the longer you wait, the better your odds of loan approval.
Start by applying for a secured credit line made for consumers with no credit history or low credit scores, which requires a deposit. The deposit is commonly equal to your credit limit, and your limit increases if you make timely payments.
Bankruptcy doesn’t have to be a negative thing if you view it as a fresh start. However, it takes some planning to keep your finances in check and avoid having to file again.