3 smart moves to make after bankruptcy
You have probably heard that tough times never last, but tough people do. The saying is quite relatable when you decide to file for bankruptcy. You may be at your lowest point financially and emotionally, but you can weather the storm and regain your financial footing.
That said, proactive changes can help to decrease the time it takes to rebound after bankruptcy. Here are three important steps to take to help get you get back on your feet, and smooth the way to a better financial future after bankruptcy.
1. Reorganize your financial habits
It is important to adopt a different spending approach than what you were used to. You can no longer spend money without prior planning or on impulse. Remember, every penny matters since you cannot afford to fall behind on pending debts. Review spending habits from previous months and prioritize bills to help you put together a realistic budget and stick to it.
It is also important to start building your savings. This can provide a financial cushion in case you fall on hard times in the future. Financial experts recommend various steps to help you build savings, including setting up an automatic transfer from your paycheck into a savings account.
In addition, you may no longer have access to credit like before, and even if you get a loan, the interest rates will be pretty high. Therefore, you must have financial discipline. Stick to your budget and avoid unnecessary spending.
2. Start rebuilding your credit score
Focus on rebuilding your credit rating as you reorganize your finances. One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future. To the contrary, after filing for bankruptcy you can begin restoring your credit right away. There are several ways you can rebuild your credit score. Some common examples include low-cost customized loans and secured credit cards. Once you find the right loan or credit card, make sure to make payments on time. In some cases, utility bills can even count towards rebuilding credit. By making regular payments you are doing the work to rebuild and reestablish your credit score.
Why is it important to do this work? In short because accessing future loans and other credit facilities will be easier and cheaper with an improved credit score.
3. Recognize that every small step matters
The road to financial recovery after filing for bankruptcy is a long and winding one, but you should not despair. The small steps that may seem insignificant are beneficial in the long run. Do not lose focus. Have a budget and make those regular payments to help reduce the risk of bumps along the road to recovery.
It may also be helpful to seek guidance before filing for bankruptcy. It will help you anticipate any challenges that may arise in the future, address your concerns, and help you prepare for life ahead. Our Miami bankruptcy attorneys have experience with the process and can help people identify their assets, debts, and exemptions so you can choose the type of bankruptcy that suits your circumstances. It costs you nothing to schedule a free consultation with one of our experienced Miami bankruptcy lawyers to discuss how Florida bankruptcy laws can help you.