A bankruptcy – whether Chapter 7 or Chapter 13 – is usually a major financial blow for anyone and in the immediate aftermath the individual’s credit and general financial standing is in utter ruins. Nevertheless, bankruptcy is designed to give you a second chance, so with time and prudent recovery action your credit will gradually improve. In fact, assuming you maintain excellent credit after a bankruptcy, you can usually qualify for a home mortgage and the like within two years of the discharge of your bankruptcy case.

Needless to say, most people that end up having to file bankruptcy do so because they lack good money management skills and fiscal discipline and if this remains so after a bankruptcy there is a very good chance that you will find yourself in trouble once again. Therefore, perhaps the best thing that you can do is to immediate find a provider of free credit and debt counselling to see where your problem lies and what kinds of measures can be taken to prevent you from getting in financial trouble again. For example, in Prescott, Arizona, one can get free initial credit counselling from Consumer Credit Counselling Services (CCCS), located at 1215 Gail Gardener Way (866-346-2227; www.cccssouthwest.org).

Assuming you undergo credit counselling, then there is a very good chance that the credit counsellors will recommend a step-by-step program designed to help you recover from your bankruptcy as quickly as possible under your unique circumstances. If not, there is still a lot of good advice and tips and tricks to help you rebuild your credit rating to be found online.

For example, one of the most popular techniques involves getting and maintaining a secured credit card. After a bankruptcy, many predatory credit card lenders will offer you new, immediate, unsecured credit because they know that by law you cannot file for bankruptcy again for eight years. These cards should be avoided at all costs as they are rife with hidden penalties and terms and conditions that are designed to put you right back in debt again. Instead, by getting a secure credit card – one that is backed by actual cash you have on deposit with the issuer – your can slowly rebuild your credit by using the card for small purchases and then fully paying it off consistently each month. It also pays to get easy to obtain store credit cards (cards that only work with that particular store) as this counts as revolving credit and can also help you rebuild your credit much faster.

Needless to say, it is imperative that you pay all of your regular bills – rent, utilities, etc. – on time and in full in order to rebuild your credit. While not all companies report late payments or partial payments to the credit bureaus, it is impossible to guess which ones will and which will not and any strike against your post-bankruptcy credit will carry a lot of additional weight. Further, bear in mind that it is entirely possible that not all of your debt will be discharge or otherwise reduced by bankruptcy, so it is vital that you maintain your agreed payment schedule for these pre-bankruptcy debts as well since failure to do so will be counted against your post-bankruptcy credit record.