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3 STEPS TO MOVING FORWARD AFTER BANKRUPTCY

Life after bankruptcy gives filers a sense of relief and a fresh start, but there are several steps you can take to avoid falling into the same traps.

Filing for bankruptcy can be a difficult decision; however, most of the time it enables you to have a fresh start. You will not have to lose sleep over not being able to pay your bills and you will generally experience reduced stress and anxiety when it comes to your finances. Bankruptcy is one way you can take control of your life again, but what happens afterward? The fact that you filed for bankruptcy will appear on your credit report for a while, but this doesn’t mean that you can’t start rebuilding your credit or looking for ways to start being more financially savvy. If you have been thinking about how you can prevent bankruptcy from happening again, there are a few things you need to know.

1. Run the numbers.

One of the first things you need to do after filing for bankruptcy is to create a new budget. It can be easy to feel free with your spending after you file for bankruptcy. The relief of having your financial burdens lifted can be incredible. Make sure that you create a new financial budget for your spending as soon as possible. You should know exactly how much money you are bringing in each month, as well as how much you can afford to spend on different areas of your life. Do not be afraid to treat yourself once in a while, but make sure you are doing it in a way that is financially responsible. A budget may seem like a simple step to take, but the reality is that it can help you find large gaps in your personal finances, and it enables you to see places where you might be spending too much. For example, maybe you need to cut back on the gifts you buy for other people, or perhaps you can reduce your monthly grocery bill.

2. Get a secured credit card.

Financial experts recommend secured credit cards for those trying to rebuild their credit as a safe alternative to using a subprime card. They work in the same manner as traditional cards, but they are secured and limited by a cash deposit in the event the consumer cannot make payments. By using a secured credit card responsibly over the course of time, the consumer can rebuild his or her credit score to the point where that person can then obtain a regular credit card. Keep in mind, secured credit cards are meant to be short-term solutions in beginning to rebuild a person’s credit score. Make sure you meet all your payment deadlines so you can start boosting your score. This is one of the best ways to start using credit again. If you plan to apply for a home loan in the future or you want to get a different credit card later, boosting your score will show lenders that you are dependable.

3. Stay organized.

Perhaps most importantly, make sure that you stay on top of things after you file for bankruptcy. Do not let your debt get away from you again. If you have medical bills you need to negotiate, do this promptly before the bills go to collection. Many medical offices will work with you to get you lower rates on your care if you simply call and ask. Others may have grants or funding available for anyone who is in financial need. If you receive an electric bill, make sure you know exactly when it is due so you can pay it on time. You may want to consider using a financial app or digital organizer that can help you to remember exactly when each bill or payment is due. This can help prevent you from falling into debt after bankruptcy.

If you are still thinking about filing for bankruptcy, but you have some questions, reach out to an attorney who can help you. The right bankruptcy lawyer can assist you when it comes to considering your options for bankruptcy.