6 Steps On Regaining Your Life Back After Bankruptcy

6 Steps On Regaining Your Life Back After Bankruptcy

Individuals and businesses alike that were affected by the financial crisis of 2008, recognize firsthand how difficult it can be to bounce back and get your finances back on track. Most people who decide to file for bankruptcy, often feel that they are at the end of their financial rope. Fear not, as I typically reassure my clients, there can be a rewarding life after bankruptcy. Consider bankruptcy as a second chance to start anew and become fiscally responsible. Regaining your life back after bankruptcy is not as grim and impossible as it may currently seem. How quickly you rally from bankruptcy depends on the measures you take to prevent potential financial pitfalls down the road. The following are a few tips on how to rebuild your future after settling your Chapter 7 or Chapter 13 bankruptcy case.

1. Monitor your credit score - keeping a watchful eye on your credit report is always a good idea, whether or not you are recovering from bankruptcy. Signing up to a free credit report monitoring service, such as Credit Karma, will ensure that you detect any unauthorized accounts and identity theft early on. Incorrect account information or ancient debts may be dragging down your credit score, and can be easily extinguished by informing the reporting agencies of the mistake. Loan companies frequently check for delinquent accounts on your credit report before approving your application or deciding on the interest rate. Make sure your credit report is up to date and reflects accurate information. When you are officially discharged in a bankruptcy, the debts that were forgiven should be reported as “discharged” on your report. If any of your accounts do not state that they have been discharged, it is important to inquire with the company as to why. The debt may not have been included in your filing papers, and will require you to reopen your bankruptcy and include that creditor. Otherwise, the forgotten creditor can continue to attempt to collect from you, despite your bankruptcy filing.

2. Start rebuilding your credit – there are plenty of tactics you can find in articles on Google to improve your credit score in no time. The most obvious one, is to always pay your bills on time, even if it is only the minimum payment. Try and avoid at all costs being over 30 days late with the payment. Payment habits, whether good or bad, account for approximately 40% of your overall credit score. Once the delinquency is reported to the three credit report agencies, it becomes nearly impossible to have the marker removed. The second way is to open new credit cards. You cannot have good credit if you have no credit. Allowing your credit to sit idle while “recovering” from bankruptcy is a sure way to guarantee that you will never have good credit. Potential creditors want to see that you are responsible by managing your credit and paying bills on time. As soon as you receive your discharge papers from the bankruptcy court, you should start applying for credit cards. Settle on two credit cards with the most favorable interest rate options, and use the cards towards small purchases (ie gas, coffee). Only spend what you can afford to pay in full when the monthly bill arrives.

3. Guard against your vices - filing for a bankruptcy is a tough decision, and you don’t want to come to the point where you will have to file again down the road. You might have decided to file for bankruptcy because you lost your job, or simply can no longer afford to keep up with your debts. The latter reason should prompt you to analyze your lifestyle and the spending habits you keep, to determine the root of your economic hardship. If your constant dinners out and taking cabs to work have resulted in you filing for bankruptcy, it might be the time to learn how to cook and change your bad habits once and for all.

4. Be careful of deceitful creditors – there are some lenders that prey specifically on people who are fresh off the bankruptcy train. As soon as you are officially discharged, you will start receiving credit card offers in the mail with over-the-top interest rates and pre-approved notices. They figure you are desperate, and although you might be, don’t fall for their tricks. One credit card carries the risk of jeopardizing everything you have worked for, and planned for in the near future. Be patient, and only sign up for credit cards that appear fair and reasonable, and that you can safely manage. Plenty of opportunities still lie ahead.

5. Set goals – as with anything in life, setting goals is important to get you to where you want to be. Monitoring your spending habits, saving money, satisfying outstanding debts, and improving your credit score are key goals to stream towards after completing your bankruptcy. Concentrate on one goal at a time and you are sure to attain positive results. Stay motivated by implementing a patient and keen approach on rebuilding your life. Consider seeking outside professional help from a financial advisor or a non-profit organization. There are online courses that offer credit-counseling classes for little or no cost. These courses and organizations may prove instrumental in helping you attain your goals.

6. Better days are ahead – filing for bankruptcy should not be a depressing time. People who carefully plan and commit themselves to not making the same mistakes again, can very much enjoy an immensely fulfilling life after bankruptcy. Be thankful that you live in a country where you can wipe the slate clean and start fresh with barely any debt. Most people see a jump in their credit score as soon as their bankruptcy case is closed. While new and potential creditors may consider you a gamble shortly after filing, they will eventually come around. With due time, you will be able to be approved for a mortgage or a car loan. Continue playing it safe and slowly building your credit, and your bankruptcy filing days will be in the past.

Mishiyeva Law- Bankruptcy Lawyer NYC 80 Wall Street New York, NY 10005 (646) 736-6328 kmbankruptcylawyerny.com