Highly Seasoned Legal Professionals

Key steps for financial recovery after filing bankruptcy

On Behalf of | Jul 27, 2020 | bankruptcy |

The bankruptcy experience is now behind you, but the lessons you learned from it are not. Your hesitancy to file for bankruptcy was understandable and typical for many people like yourself. But in relying on it, you organized your finances, determined financial priorities and received a chance to move on. Well, now what?

Recovering from bankruptcy awaits you. This may require a number of steps. It will lead you in a new direction that ideally helps you avoid making any additional financial missteps. Bankruptcy helped you, but now it is time to make important changes to your financial lifestyle and thinking to get back on track to boosting your credit score. So long, financial worries; hello, a new beginning.

Reexamine spending habits, monitor credit report

Embracing change is critical to recovering from bankruptcy. Not only will it lead you toward the path of good credit, but it will also provide you with peace of mind along with a sense of fulfillment. Here are a few steps to consider:

  • Understand what led to your bankruptcy. An introspective approach can lead to financial changes in your life.
  • Create a budget and strictly follow it. By tracking your expenses, you know where your money goes. This forces you to relearn spending habits.
  • Focus on building an emergency fund. Ideally, it should be at least six months’ worth of expenses. However, if that goal is not realistic, please set aside whatever money you can.
  • Closely monitor your credit report. Errors are not uncommon, potentially affecting matters such as employment applications and mortgage rates. Get the credit reporting agencies to correct their mistakes.
  • Obtain a secured credit card, great tools for people with a history of no credit or bad credit. Such cards resemble regular credit cards but are backed by cash deposits you make into an account. With a secured credit card, your credit limit is equivalent to the amount of money you deposited into the account.
  • Do your best to pay your bills on time.

You can successfully do this as long as you understand that bankruptcy recovery takes time and patience on your part. Reestablishing your credit is important.