Bankruptcy is a valuable legal tool that lets you get rid of overwhelming debt. But, the benefits are short lived if you come out of your case and take on a lot of new debt. In order to make the most of your case, it is best to have a plan for how to budget your money after your case is over. Part of the goal of filing bankruptcy is to help you get out of debt, and also to stay out of debt. When you are able to come up with a financial plan that works, the emotional burden that is lifted can last for years.
Three tips to making a post bankruptcy budget work include taking the following steps:
• Establish a safety net, to be used only in emergencies. When you get rid of some of your debt during bankruptcy, take the money you save by not having to pay as much money per month for your bills and set up an emergency fund. That way, when you come up against an unexpected need, you will have the cash on hand needed to deal with the situation. This will save you from going into debt for costly car or home repairs, or for a medical expense you were not counting on having arise.
• Decline offers of credit, which you will receive shortly after your bankruptcy case is over. It is a misperception that people who file bankruptcy are never able to take out a loan again, and many people begin receiving offers within months of their bankruptcy case closing. When you do get these offers, shred them.
• If you do take on additional debt, make sure that you are able to pay it in full rather than having it add up each month. When you are not able to pay an interest bearing expense in full each month, the amount only grows. Pretty soon, you have more debt than you originally took out, and can find yourself in financial trouble again.
We understand that it is not always possible to stay on budget, and that life does happen. If you have filed bankruptcy before, and are in financial trouble again, you do have options. In either instance, whether you have filed before or are in need of assistance for the first time, we can help.
For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.