Got Business Debt?

nyc criminal lawyers over 30 years of experienceLearn More About Delancey Street

Visit their website today. They can help resolve business debt.

Get Free Consultation

How To Rebuild Your Credit After Debt Restructuring

By Spodek Law Group | February 20, 2024

How To Rebuild Your Credit After Debt Restructuring

Debt restructuring can provide much-needed relief if you are struggling with high amounts of debt, but it can also damage your credit score. The good news is that with some time and effort, you can rebuild your credit after debt restructuring. Here are the key steps:

Get Current on Your New Debt Payments

The first critical step is to get current and stay current on any payments associated with the restructured debt. This includes making monthly payments on time under the new terms of your debt. Lenders will be monitoring your payment activity, so showing you can handle the new responsibility will help improve your credit over time.

If you are working with a nonprofit credit counseling agency, be sure to make your monthly debt management payment on time each month. According to credit experts on Reddit, “One late payment can negatively impact your credit score progress for years so this step is crucial”[1]

Pay Down Balances

In addition to making regular payments, also try to pay down balances whenever possible. The credit scoring models look at how much you owe relative to your total credit limit. Getting balances well below the limit can help boost your scores.

According to attorneys on Avvo, “Paying down debt is one of the fastest ways to improve your credit score after financial difficulties because this directly lowers your credit utilization ratio”[2]. Shoot to get balances down below 30% of the limit on each account.

Be Patient

Rebuilding credit takes time after going through debt restructuring. The impact on your credit score can be significant, so expect it to take a year or more to recover. The key is to consistently make on-time payments and keep credit utilization low.

According to credit experts on Quora, “Typically it takes about 18-24 months to see a credit score bounce back after debt restructuring or bankruptcy. The length of time depends on the severity of the delinquency history before the accounts were restructured”[3].

So be patient and persistent with responsible credit behaviors and you will see your scores slowly improve.

Consider Secured Credit Cards

Another option that can help in rebuilding credit is getting a secured credit card. With these cards, you provide a cash deposit upfront that acts as the credit limit. This way you still get to use a credit card to help establish positive payment history, but the bank is protected if you default.

According to attorneys on FindLaw, “We generally recommend secured credit cards for anyone with a credit score below 600. This includes people rebuilding credit after debt settlement or bankruptcy”[4].

Just be sure to always pay the monthly bill on time and keep the balance well below the limit. Over time, responsible use of a secured card can help improve your scores.

Monitor Your Credit Reports

It’s also important to monitor your credit reports regularly to ensure no errors or fraudulent activity. You can obtain free copies of your reports annually from AnnualCreditReport.com[5]. Scan the reports closely and dispute any inaccurate information with the credit bureaus.

According to credit experts on Reddit, “Be vigilant about checking your credit reports during the rebuilding process. Sometimes old accounts get erroneously reported as late or delinquent. Getting these removed quickly is important”[6]. Staying on top of your credit reports helps optimize your scores.

Ask Creditors to Report to Credit Bureaus

An additional idea is to contact your creditors that are not currently reporting your positive payment history to the credit bureaus. Ask them if they would be willing to report so that your rebuilding efforts are reflected in your credit reports.

As recommended on Quora, “Any extra positive payment history you can add to your credit reports will help offset the negative records from the debt restructuring. Getting existing creditors to start reporting is an easy way to do this”[7].

Wait Before Applying for New Credit

Finally, be cautious about applying for any new credit right away. Too many new credit inquiries and accounts can actually hurt your credit building progress. Most experts recommend waiting at least 6 months to a year before taking on new credit.

According to lawyers on LawInfo, “Resist the temptation to open new credit cards or apply for loans as you rebuild. Adding new inquiries and accounts too soon can slow down improvement”[8]. Give your scores some time to recover first.

Rebuilding Credit Timeline

To summarize, here is a general timeline for rebuilding credit after debt restructuring:

  • Months 1-6: Get current on new debt payments, pay down balances, check credit reports, and ask existing creditors to report payments.
  • Months 6-12: Continue good payment behaviors and monitoring credit reports. Consider adding a secured credit card.
  • Months 12-24: Credit score should slowly improve as positive history builds. Be patient and persistent.

It takes diligence and responsible behaviors over time, but credit scores can recover after the major hit of debt restructuring. Stay focused on the steps outlined here and you will be in a much better credit position in 24 months.

For additional resources on rebuilding credit, check out these helpful sites:

I hope this gives you a good roadmap for rebuilding your credit after undergoing debt restructuring. It takes time and discipline, but your scores can recover. Please reach out with any other questions!

Free Consultation


I was searching for a law firm with some power to help me deal with a warrant in New York . After 6 days I decided to go with Spodek Law Group. It helped that This law firm is well respected by not only the top law firms in New York , but the DA , Judge as well. I...

~Fonder Brandon

5 Stars
It was my good fortune to retain Spodek Law Group for representation for my legal needs. From the beginning, communication was prompt and thorough. Todd, Kenneth and Alex were the first people I worked with and they all made me feel comfortable and confident that the team was going to work hard for me. Everything was explained and any concerns...

~A G

5 Stars
After meeting with several law firms, I chose the Spodek Law Group not only for their professionalism and experience, but for the personal attention given to me right from the initial consultation. It is important to recognize how crucial having the right legal team is when faced with potentially life altering events that impact families and the lives of loved...

~George Cherubini

Spodek Law Group

White Glove Service

We Provide Superior Service, Excellent Results, At A Level Superior To Other Criminal Defense Law Firms. Regardless Of Where Your Case Is, Nationwide, We Can Help You.
View More

Request Free Consultation

Please fill out the form below to receive a free consultation, we will respond to
your inquiry within 24-hours guaranteed.


85 Broad St 30th Floor, New York, NY 10004


get directions

Los Angeles

611 S Catalina St Suite 222, Los Angeles, CA 90005


get directions


35-37 36th St, 2nd Floor Astoria, NY 11106


get directions


195 Montague St., 14th Floor, Brooklyn, NY 11201


get directions
Call Now!