Although there are many benefits of filing for bankruptcy, you can't overlook the fact that this will change your life in a number of ways.
For example, a bankruptcy will remain on your credit report for a minimum of seven years. This can make it difficult to secure a loan during this time period.
Here are five steps you can take to regain your financial footing once the bankruptcy process is in the past:
- Create a budget and stick to it: Creating a budget is a great start, but sticking with it is what matters most.
- Use cash: In the past, you may have used credit cards to make purchases. Now that you've gone through bankruptcy, it's time to turn your attention to the many benefits of a cash-based system.
- Pay every bill on time: Regardless of what bill it may be, you need to pay on time. You don't want to get into bad habits that could result in trouble once again.
- Use a secured credit card: Dspite the fact that you want to rely heavily on a cash based system, the use of a secured credit card can help re-establish your credit and build your score.
- Avoid big purchases. Even if you qualify to buy a home or car, it may be best to put this off for the time being as you become familiar with your finances after bankruptcy.
With so many benefits of Chapter 7 and Chapter 13 bankruptcy, there may come a time when you realize this is the best way to improve your finances. Once you take the first step, you should then begin to plan for life after bankruptcy.
Source: Bankrate, "10 ways to bounce back from bankruptcy," accessed June 04, 2018