Updated on February 28, 2019
10 Tips for getting your Life Back after Bankruptcy
Being bankrupt is not something that anyone can survive without having their entire lives and lifestyles turning upside down. It certainly sets you on a very different path for your future than the one that you have probably planned for yourself. This is what makes filing for a bankruptcy case very stressful.
However, once that phase passes, you need to quickly get your life back on track. But how can you do so? Well here are 10 helpful tips from one of the most reputable attorneys, Walter Benenati, that can help you achieve just that!
- Restore your credit score- Since bankruptcy makes your credit score drop to 0, it is important to start establishing it immediately. This can be done by lengthening the credit history and getting secured credit cards for yourself.
- Set up a savings account- Bankruptcy is often a result of the occurrence of an unexpected event. It can lead you to depend on your credit card or payday loan companies for necessary expenses, which can sometimes lead your debts to blow up. Therefore, to avoid such a thing from happening, it is wise to oven a savings account and regularly feeding it with certain amounts of money. Try to keep this account intact for as long as possible.
- Create budgets- One of the main reasons for bankruptcy is often the careless use of your finances. Spending more than you can afford is the cause of improper planning and budgeting. To make sure such a thing does not occur again, you need to create proper budgets for yourself. The budget must allow the creation of some savings, which can help you in the future, lest another unexpected event occurs again.
- Repay loans regularly- When a bankruptcy case is filed, the unsecured debts are eliminated or discharged. This can help you to start afresh by regularly paying off credit card balances and other acquired loans.
- Keep in mind the reason for bankruptcy- You must be able recognize the reason behind your bankruptcy. By evaluating your previous financial activities and spending habits, you can pin point exactly what mistakes you made and risks you took. Once the problem has been found, you must create strategies to effectively save yourself from repeating the same mistakes again.
- Do not make big purchases- The wise way of handling your bankruptcy is to learn from your mistakes and refrain from doing them again. The habit of making unnecessary big financial purchases is one of those habits which you must not indulge yourself in. If you feel you have money to spare, use it to repay your debts, rather than creating more debts for yourselves.
- Know your lending limit- After bankruptcy, if you have an urgent need of finances and therefore wish to borrow again, you must try to lend only as much as you can handle. One rule of borrowing states that ‘borrow an amount which is not more than your monthly income’.
- Maintain credit score- You should always keep in mind to use your available credit wisely. Keeping your credit balance at 10% or less than that of your limit can help improve your credit. Keep in mind to never exceed 30% of your credit balance. This way, your credit will be built in a way that showcases your reliability.
- Avoid excessive card hopping- Switching cards regularly may help you maintain a good rate. However, it does not do much for your credit rating! The better way to build a good credit is to have a long-term record with only one or two cards.
- Stay vary of scams- Scams occur left and right when you are trying to recover from bankruptcy. People might try to lure you by promising you that your credit can be fixed in a short time! This is one scam that can pull you further under debts! While building a good credit score again is hard, it does not take any money and can be done on yourself!
It is very much possible for you to get your life back after bankruptcy, no matter how hard it sounds! Just by keeping in mind the above-mentioned tips, you can live a normal and respectful life even after bankruptcy.