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Bankruptcy does not spell permanent doom for one's credit report

About 500,000 persons file bankruptcy in the United States annually, and Washington state gets its proportionate share of those filings. The main drawback that most observers attribute to bankruptcy is its dismal effect on one's credit rating and scores. The negative impact on credit scores does occur, but the other side of that coin is that credit repair after bankruptcy is possible and attainable with some focused effort.

The first way that credit may be rebuilt is by continuing to pay on certain secured counts that existed prior to the bankruptcy. Thus, if one retains a car and the car loan in a bankruptcy, there will be a salutary effect on the credit rating after the bankruptcy discharge, as long as the payments are made meticulously on time. The same applies for those persons who retain their house and mortgage in a bankruptcy. After discharge, payments are made until the mortgage is paid off.

The regular payments of car loans and mortgages during and after the bankruptcy are genuinely strong tools for credit score improvement. From the time that the individual or married couple file for bankruptcy, it is crucial that all payments for living expenses are made on time. After the discharge, it is possible to obtain a secured credit card, or sometimes a small unsecured one, depending on the circumstances.

Making the payments in full on such an account each month is necessary. Retaining an attorney or a credit repair expert after the bankruptcy may keep the credit bureaus on their toes and paying attention to accurate reporting on the client's account. Inaccurate reporting of past accounts can be monitored by the attorney and letters may be sent to the credit bureaus to work gradually on improving the credit record and score.  In the state of Washington, these issues may be further discussed with an experienced consumer bankruptcy attorney prior to making a decision.

Source:, "How to Rebuild Credit After Bankruptcy", Maurie Backman, Dec. 22, 2017

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