No individual or business is immune from bankruptcy. One of the most recent examples in Illinois involves Star 105.5 FM filing for bankruptcy; the company has accumulated around $2.6 million in debt.
Many individuals find they can get through bankruptcy all right without losing any major assets. However, true success relies on what you do after the court discharges your bankruptcy. There are certain actions to undertake in the immediate aftermath, so you can get your finances back in excellent order soon.
1. Retain all the paperwork
You will receive dozens of pages of paperwork following the discharge, and you want to hang on to everything. You can expect to receive your initial petition, notice of filing and discharge forms. You may also receive certifications related to credit counseling if you needed to take specialized courses as part of your bankruptcy agreement. Keep all of this filed away. It will be extremely beneficial if you need to apply for a loan in the near future.
2. Check in with credit bureaus
Approximately six months after the discharge, you want to check in with the major credit bureaus. You should receive at least one free credit report annually, and six months is enough time for the agencies to revise their records. You want to ensure all the bureaus report your debt balance is at zero. If a bureau does not fix it within six months, then you want to bring the discrepancy to a representative's attention.
3. Create a new budget
To prevent any financial disasters in the future, you should create a new budget based on the amount of income your household brings in every month. Part of this budget should include an emergency fund. Set aside some money every month in case a sticky situation comes up, so you do not have to dip into a new line of credit. While you may need to get a new credit card eventually, be extremely cautious going forward.