Contrary to the popular saying, filing for bankruptcy is not a bad thing. It is, in fact, a good thing as it eventually gives you the opportunity to have a clean financial slate. If your credit is in shambles, bills are piling up, your rent is due, and you have no means of making your monthly payments on your credit card – you should consider filing for bankruptcy. Chapter 7 bankruptcy is the best option if you can’t make your credit payments, but if you need a payment plan to pay back all your debt, you should opt for Chapter 13 bankruptcy. After filing for bankruptcy, all of your unsecured debts would be discharged, and you’ll have a clean financial slate – but it is not always easy. The red flag on your credit report that indicates you’ve filed for bankruptcy will make it hard to get any kind of loan or credit. Also, it will remain on your report for seven to ten years, depending on the type of bankruptcy you choose. In this article, we will discuss what life looks like after bankruptcy and how to build your credit after.
Getting back on your feet after filing for bankruptcy
Here’s how to get back into good standing after filing for bankruptcy:
Create a budget and stick to it
If you want to stay on top of your finances, you need to stick to the budget you create. With a budget, you’ll be able to see your expenses and income – this way, you’ll able to know what you are spending your money on. With your budget, you’ll also understand in which areas you can cut back. Budgeting is very easy, but if you need help, a non-profit credit counseling agency is your best bet. If this is out of your reach, check out personal finance resources at the local library.
Maintain a job
If you want to get back on your feet after filing for bankruptcy, getting and keeping a job is the best way to do it. A stable job is essential as it shows creditors how reliable you are. Once you have a stable job, you’ll be able to pay your bills and have savings.
A great way to reduce your chances of filing for bankruptcy in the future is to save money. If you have money saved, you won’t rely so much on credit. An emergency fund is also important as it provides a cushion for unforeseen circumstances like medical bills, loss of a job, and more. When you have savings and an emergency fund, the probability of filing for bankruptcy again is really small.
Pay all of your bills
It is very important that you pay all your bills on time so your credit record after filing for bankruptcy remains clean. Your percentage of on-time payments will go up over time if you are consistent.
To wrap it up
Millions of people have filed for bankruptcy, so do not be ashamed if you need to as well. Bankruptcy is simply a tool available to you so you can get back on your feet. You just need to make a conscious effort to make the right financial decisions so you can stay on the right path after bankruptcy.
If you are considering bankruptcy or you have already done so, you may have questions. The attorneys at Dsouza and Strachan have the knowledge and experience to help you navigate the complex issue of bankruptcy. Contact Dsouza and Strachan today for a free consultation.