People in Mississippi who are considering bankruptcy might wonder if they will be able to recover financially. One study by Lending Tree found that three years after a bankruptcy, people applying for a mortgage without a bankruptcy on average only paid about 19 bps less than those with a bankruptcy. Two years after a bankruptcy, around 65 percent of people had brought their credit score up to 640 or more.

Once a bankruptcy is discharged, the first step is to apply for a secured credit card. To get this type of card, a person puts down a deposit, and the initial credit limit is usually around the same as the deposit amount. The next step is to use the card conservatively, putting no more than 20 percent of the total credit limit on it at a time and paying it off each month. Once it has been established that the person will not max out the card and will pay it off responsibly, it might be possible to apply for a regular type of credit card.

Credit scores and issues such as identity theft can be monitored by signing up with a credit monitoring service. Although many bankruptcies occur because people have issues such as medical debt or job loss, those who struggle with spending should take a look at their budgets and try to improve.

One advantage of filing for bankruptcy is that it stops all actions against a person ranging from creditor harassment to foreclosure, lawsuits and more. Certain debts, including some taxes, child support and most student loans, cannot be discharged in bankruptcy, but in Chapter 7, most other debts can be, and a person may be able to make some assets exempt. A Chapter 13 bankruptcy may allow a person to keep certain assets and pay creditors using a payment plan of three or five years.

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