Bounce Back From Bankruptcy

Share Article

MMI offers tips on restoring credit after financial ruin

News Image
Bouncing back after bankruptcy can be tough

According to the Bankruptcy Abuse Prevention and Consumer Protection Act, consumers are required to complete an approved credit counseling session prior to filing for bankruptcy. After filing, debtors must complete an approved financial education course before they can discharge their debts. These requirements were included to ensure consumers make an informed choice about bankruptcy, its alternatives and consequences. Perhaps more importantly, they were designed to provide bankruptcy filers with the financial skills necessary to build a strong financial foundation and avoid future financial problems.

Filing for bankruptcy protection can impact your credit report and score for up to 10 years. The good news is that no matter how bad things look, you can always bounce back and re-establish a good credit score. The financial experts at Money Management International (MMI) offer the following advice to help re-build credit after bankruptcy.

Learn from your mistakes. Take a hard look at your past financial situation and figure out what went wrong. If overspending was an issue, learn to live on a budget. MMI's bankruptcy counseling and education sessions are designed to assist you in building a solid budget and spending plan to help you get back on the path to financial wellness.

Pay yourself first. Unfortunately, bad things sometimes happen to good people. Expect the unexpected and put money away for the rainy days. Having an emergency fund can keep a minor financial setback from turning into a major financial crisis.

Clean up your credit report. It's important to take the necessary steps to dispute any incorrect information on your credit report. Visit for one free report from each bureau every year.
Use credit wisely. Credit cards are useful tools, but should only be used as a tool of convenience, not as an extension of your income. Always have a plan for payoff when making purchases with credit cards; ideally less than 90 days.

Pay bills on time. Create a calendar with due dates and payment amounts. Set up automatic payments with your bank to ensure timely delivery. Also, don't neglect creditors such as the phone and utility companies. Many people don't realize these are creditors too.

Get a secured line of credit. Obtaining new credit after a bankruptcy can be difficult. Consider a secured account or a small personal loan with a bank or credit union if traditional lines seem out of reach.

"Bouncing back after bankruptcy can be tough," said Cate Williams, vice president of financial literacy for MMI. "When trying to reestablish credit, it pays to be persistent and patient; there are no quick fixes. The good news is that scores are continually updated and may move several points each month."

About Money Management International
Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in brand offices and 24/7 by telephone and Internet. Services are available in English or Spanish. To learn more, call 800-762-2271 or visit


Share article on social media or email:

View article via:

Pdf Print

Contact Author

Tanisha Warner
Visit website