1. Plan a budget
The first step to take after filing for bankruptcy is to sit down and plan a budget. Reviewing your spending habits, cutting out what’s unnecessary, and tracking what’s important will help you stay in control of your finances. Even if a sudden life event like illness, divorce, or job loss was your reason for bankruptcy, anyone can benefit from making a budget to avoid having to file for bankruptcy a second time.
2. Start saving money
When you properly set your budget, you will know just how much you can realistically save each month. While some of these savings should go towards a savings account for things like retirement, children’s college, or even personal interests like vacations, you should also plan an emergency fund. This is separate from savings and makes sure that if you face an unexpected and expensive situation, you have the funds to fall back on.
3. Work on reestablishing good credit
The biggest question people have after filing for bankruptcy is how to reestablish your credit rating. Luckily, there are steps you can take to immediately start rebuilding your credit. Here are just a few steps to take:
Apply for a secured credit card
These are credit cards that are designed for people with poor credit. After you put down a cash deposit, you can use this line of credit to make responsible repayments, therefore rebuilding credit.
Get a credit-builder loan
The money you borrow in a credit-builder loan goes into a secured savings account. You will make monthly payments towards the loan, and once all payments are made, you will have access to the money and a record of on-time repayments.
Become an authorized user
If you are having trouble obtaining a credit card yourself, you can become an authorized user on someone else’s credit card. Even if you never use the card, the activity will appear on both your credit reports, raising your score. Just make sure the credit card holder has healthy spending habits.
4. Avoid job hopping
Frequent job changes won’t hurt your credit score, however lenders often look for consistency when deciding who they will loan to. When you hold down a job, this can demonstrate to lenders that you are dependable and responsible, making it more likely for them to trust you to make your repayments, despite your record of bankruptcy.
5. Keep a close eye on your credit reports
Regularly review your free credit reports to make sure your bankruptcy is displayed correctly and that all of your information is correct. Even after filing for bankruptcy, some of your discharged debts might show up on your record as active. If this occurs, we can work with you to ensure the credit agency updates their records.
When you make regular credit report checks, you should also check on your personal information and employer information. Anytime you apply for a loan and need to send a credit report, it’s important that all information is up to date for your best chances of being successful in getting the loan.
6. Educate yourself
If you are feeling a bit behind in things such as budgeting, good vs poor spending habits, mortgage or loan processes, don’t be afraid to reach out to someone or do some research in your spare time. Educating yourself on responsible money management to create healthy financial habits is one of the most important things you can do for yourself after bankruptcy.
Contact Barbara B. Braziel Law
We always make sure our clients in Savannah and surrounding areas understand that there is life after bankruptcy — a life that will be much less stressful than dealing with debts. If you have decided that bankruptcy is the path you need to take for a fresh start, contact the Law Offices of Barbara B. Braziel for a free consultation.