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The pivotal date in all cases occurs the day the final order is
entered. This discharge date eliminates all dischargeable debts in both
Chapter 7 & 13 cases. When filing bankruptcy, all events lead up to this
point, and assuming all requisite legal requirements are meet, the court
must grant discharge. Then, the next important step becomes, what is the
best method for restoring credit after bankruptcy?
- Pay all obligations at least two weeks early. As a common
practice, far too many creditors hold payments for a week to ten days
merely to collect late fees.
- Consider building sequential installment notes paid monthly, over
12 months, secured by a certificate of deposit. Start small, and
increase by several hundred dollars each time the note is satisfied. Pay
off the first note after 6 months, and begin anew to build a solid
credit history of prompt payment. Credit cards have little impact,
whereas installment notes, reported by local banks, carry much greater
weight.
By insuring only positive credit events are reported, each month, the
adverse impact of filing bankruptcy pales with the passage of time until
it becomes almost inconsequential. Most debtors who are concerned with
restoring credit after a bankruptcy filing overcome past histories in as
little as 24 months. No, credit will not be perfect, but will, in all
likelihood, be substantially greater than the FICO scores and credit
ratings posted during the months or years leading up to discharge.
Consider improvement as your goal, and success will build each month.
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