Many people worry about being able to live once they file for bankruptcy protection. While it is true that this process will impact your ability to get credit for a while, it isn’t the end of the world. In fact, it is often better to file for bankruptcy than it is to have a bunch of unpaid, charged-off accounts on your credit report.
If you are worried about being able to rebuild your credit, you don’t have to worry at all. You can actually start this process well in advance of the day you actually get credit again. One of the first things that you need to do is to give your money a job. Each dollar that you bring in should be budgeted so that you know where it is going before it is deposited.
Once you know where your money is going, you can adjust the plan as needed to help you meet your goals. This might not happen all at once. It will likely be a lengthy process that you have to go through to get to where you need to be after you file for this type of financial protection.
Make sure that you get into the habit of paying all of your bills on time. You don’t want to have any that are late, especially if it is a creditor who will report to the credit bureaus. This can also help you when you do get credit again because you will expect that you have to pay the bill on time.
When you do get new credit, take the time to review the terms that come with it. You will likely have to start with low credit lines, such as department store cards. Pay these on time to establish a recent, positive payment history. Over time, you will likely be able to increase your borrowing power.
Source: The Street, “Bouncing Back From Bankruptcy – Sooner Than You Think,” Brian O’Connell, accessed June 08, 2018