Everyone makes a mistake once in awhile. Maybe you bombed out of college but managed to wrack up a good amount of college tuition debt first. Maybe you got a little credit card happy in your twenties and realized a little too late that you actually have to pay all that money back or it can really affect all of your money in the future.
Whatever mistake you’ve made that affected your credit can always be fixed. Bad credit is only the end of the world if you refuse to take any steps to fix it. Those steps are to get help with credit repair and taking the time to learn from those mistakes so that you don’t make them again once your bills are all squared away.
There are many reasons why people file for personal bankruptcy. You may have gone through a divorce and lost everything, you may have done that teens and twenties thing with the credit card and racked up more debt than you knew what to do with, or maybe you defaulted on one too many loans (nope, you can’t get rid of school loans that way, not easily anyway).
The good thing is that a bankruptcy only stays on your credit report for a certain amount of time. Plus, there are ways you can work to rebuild your credit during that time. Aside from getting assistance when any debts that weren’t taken care of with bankruptcy (like medical and college), you should also consider opening some new accounts to start rebuilding, like a small personal loan or a new credit card.
Divorce doesn’t put everyone in debt, but if your spouse fights for half or more of what you shared it could put a damper on your credit. If you’re paying alimony or child support they too can make having money to keep your bills paid a difficult task. It’s already too late for amicability, it may be time for debt counseling and a second job.
The key to dealing with school loans is to start paying on them while you’re still in school. Even if all you can afford to do is pay on your interest it’s good to start there. If you get any stipends from your loans always use that to make a payment (it can make a huge difference).
Focus on your schooling and finding a career post (or even during) schooling so that you know you’ll have a steady income flow that allows you to make those school payments and keep from letting those loans go into default.
If you’re not paying your home loans you could lose your home. There may be some leeway when it comes to lateness, but it’s not going to look good to the place your borrowed money from. Don’t miss your property taxes either, or you’re still at risk of ended up homeless.