Rebuilding credit after bankruptcy and divorce

Facing both bankruptcy and divorce is a challenging double whammy. But sometimes it's necessary to dig deep down and keep going, knowing there's a new life waiting on the other side.

It's certainly not uncommon to have problems with both money and your marriage. After all, money problems are often a major stressor in a marriage and can contribute to its breaking up.

If you are looking to both end your marriage and obtain debt relief, it will be important to decide which to file first: for divorce or for bankruptcy. The answer will depend on the specific circumstances of your family and should be considered carefully with appropriate advice.

In seeking to recast your life, there are lots of people in similar situations. Nationally, in 2011, 1.5 million people filed for bankruptcy. About 450,000 of those were women. This year, estimates are that the number of women filing for bankruptcy will be even higher. It may be as high as 1 million.

Whether you're a man or a woman, how do you start rebuilding credit after bankruptcy? Keep in mind that it can be done. But it's important to start small.

For example, you may want to make your first credit card after bankruptcy a card from a retail store or a gas station. These stores may be willing to give you a card sooner than the bigger cards like Visa or MasterCard.

Another option would be apply for a secured credit card through a bank or credit union. You'll have to come up with a small sum of money to get a card with a matching limit. But it may be worth it, because it's a way to begin rebuilding your credit history.

Keep in mind, too, that payment history is very important in the compilation of credit scores. In fact, it accounts for 35 percent of a so-called FICO score. Make sure, then, to make your payments on time.

Source: "Tips for women to bounce back from bankruptcy," ABC News, Ric Romero, 11-18-12

Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our credit after bankruptcy page.