HOW TO RECOVER FROM BANKRUPTCY

Filing for bankruptcy can be a mixed blessing. It may feel like you’ve hit rock bottom financially, as you may have very little left in the way of assets, and your credit score may be at an all-time low. On the other hand, your debts are clear, and you now have the opportunity for a fresh start.

There will indeed be hardships ahead. Bankruptcy stays on your credit report for up to ten years, making it difficult to qualify for mortgages or other credit payments. You will need to address the root cause of your financial hardship, find ways to manage your cash flow and stay out of debt in the future.

If you are in the process of filing for bankruptcy, there is hope. Many people have successfully gone through bankruptcy legal proceedings and come out on the other side, turning things around and rebuilding their lives. And there is no reason why you cannot do the same.

The following article offers some helpful tips for speeding up your recovery from bankruptcy. Good luck!

Avoid repeating past mistakes

Whatever circumstances led you to get into debt in the first place, ensure the same doesn’t happen again. Look at the root cause of your struggles and pinpoint the mistakes you should avoid in the future. You may rethink your attitudes to spending and borrowing or put an end to habits such as gambling and risky investing. It may be a good idea to work with a credit advisor. They can help you examine your financial history and current circumstances and help you establish a long-term recovery plan.

Keep your bankruptcy paperwork

There will be times when you need to apply for credit, whether to purchase a new car, take out a mortgage, or any other significant life step. Filing for bankruptcy will make this a lot more complicated. It will help to have all relevant paperwork from your bankruptcy proceedings as a reference. You may get asked for this as proof of your situation or if a creditor comes to collect a debt that your bankruptcy has already cleared. Being prepared will be helpful.

Start saving money

It would be best to establish good financial habits to avoid the same thing happening again. Learn how to manage your money more effectively and devise a budget to help you keep track of your earnings and spending. Try to deposit a portion of your income into a savings account. Over time this will build up and help you live more comfortably within your means.

Work on your credit score

Your credit score will have taken a hit due to your filing for bankruptcy, but that doesn’t mean you can’t rebuild it. A secured credit card will help, as these do not require a credit check but a cash deposit. Pay your bills on time without fail and consider whether taking out a credit builder loan might enable you to give your credit rating a boost. Bringing your credit score back to its previous level will not happen overnight. Still, with patience and commitment, you will gradually see it increase over time.

Set goals

If you have something to aim for, this can make the recovery process much more manageable, and you’ll find it easier to maintain good habits. Perhaps you are working towards buying a house or a car or even going into academia to acquire better job prospects. Setting yourself an achievable goal like this is a great way to maintain financial well-being. Work out how much you need to save and the steps involved in achieving this objective. Then break this down into manageable chunks, allowing you to experience small, regular wins, as this can help to make a significant, potentially daunting goal seem more achievable. Keep track of your progress over time; eventually, all your hard work and commitment will pay off.

Anyone can recover from bankruptcy by following these tips and staying on top of their finances. If you are considering filing for bankruptcy, or need some guidance on the recovery process, get in touch with Fox-Miles and Associates for a free consultation.