No doubt about it, filing for bankruptcy is scary. When you’ve hit the point where filing is the only option, fears and questions of how to get back on track can be crippling. We’re here to help. Recovering from bankruptcy isn’t easy, but it is possible!
1. Evaluate yourself and find your weakness: It’s important to take a step back and take an honest look at where you went wrong. Were there aspects of what got you to bankruptcy that you could have controlled and changed? Take a good, hard look at your spending habits and finances and figure out what to do differently.
2. Make sure your credit reports are up to date and monitor them: You should check your credit reports every few months to make sure every discharged debt or closed account is reported correctly. You may consider signing up for a credit monitoring service, but be careful and research the company before signing up for anything!
3. Set a budget and pay bills on time: Check out our Budgeting 101 or the budget templates in our Home Management Binder for budgeting tips. Stay organized and pay everything on time. Your payment history is a huge chunk of your credit report and missed payments will have quite an impact, especially after bankruptcy.
4. Get a secured credit card and pay it in full every month: Secured credit cards have low credit limits and high interest rates. It requires a cash collateral deposit which becomes the credit line. Paying your balance every month will help you establish a positive credit history, as secured cards report to the credit bureaus just like regular credit cards do!
5. Read, read, read: Take your time before you sign anything. Read the fine print and do research on any offers that are presented to you. After you file bankruptcy, you may be targeted by predatory companies. Be wary of credit repair businesses and companies offering you loans to fix your credit. Keep in mind, you are the only one that can improve your credit. No program, especially one that charges a fee, can have things removed from your credit report or promise an improvement in your score. Take your time when making financial decisions and going over offers, read everything, ask questions and be sure you fully understand what you are signing up for.
Bankruptcy is hard. Life after bankruptcy is hard. Hang in there, and you’ll be on your way to a debt free, financially responsible life!