Filing a bankruptcy doesn't mean you'll receive a discharge or have your debts forgiven. A judge takes a close look at the case, and sometimes, a judge will dismiss a bankruptcy. What's more, you can voluntarily dismiss a bankruptcy if you do not want to proceed with the process. A bankruptcy dismissal means you're still liable for the debts. Fortunately, there are ways to rebuild credit after a dismissal.
Contact each creditor and workout a new repayment plan. Mention your desire to remove the debt in order to avoid a bankruptcy. Ask credit card companies to lower your interest rate, talk to your mortgage company about a modification to reduce your monthly payment and speak with your auto loan or student loan lender to see if they have provisions for distressed borrowers.
Get rid of credit cards. Using credit cards on a regular basis plays a role in high debts and can contribute to bankruptcy. Stop using plastic, and if necessary, damage your cards.
Live on a budget. Do a budget at the beginning of each month and cut out extra spending to create additional income. Cancel unnecessary services such as cable, lawn care and hair appointments. Stop eating out and shopping. Put extra money toward debt.
Seek part time work and use this money to get rid of debt and rebuild credit. Paying down debt after a bankruptcy dismissal helps increase your credit score because it lowers your debt to income ratio.
Extend your due dates instead of missing payments. Pay all creditors by the due date, or contact your creditors if you're having payment issues to get an extension.
Valencia Higuera is a freelance writer from Chesapeake, Virginia. She has contributed content to print publications and online publications such as Sidestep.com, AOL Travel, Work.com and ABC Loan Guide. Higuera primarily works as a personal finance, travel and medical writer. She holds a Bachelor of Arts degree in English/journalism from Old Dominion University.