What Happens after Filing Personal Bankruptcy?
Rebuilding Credit is Possible After a Bankruptcy Discharge
Free Bankruptcy Attorney Contact
Filing bankruptcy and having your debts discharged or reorganized can be a tremendous relief. Starting fresh after personal bankruptcy can allow you financial freedoms that you may not have enjoyed for a long time, so you may not know where to start.
While the past to financial freedom and responsibility may be difficult, bankruptcy can help give you a fresh start to rebuild credit.
If you haven't filed for bankruptcy yet, we can connect you with a local bankruptcy attorney who can help you explore the possibilities, including life after bankruptcy, in more detail. Simply fill out our free bankruptcy evaluation form or call 877-833-2410 today to speak with a bankruptcy lawyer near you.
Credit after Bankruptcy
Some people do not have the desire to get credit after having all of their debts freshly discharged. Other people welcome the fresh start that filing bankruptcy provides and wish to begin rebuilding their credit scores for a secure financial future. Even for those who want to avoid credit card debt in the future, rebuilding credit may be an important step toward purchasing a home or automobile.
Bankruptcy, of course, has a negative impact on your credit report, but it also has the positive impact of requiring that discharged debts be reported—if they're reported at all—as zero balances. It's an opportunity to start with a clean slate, and one no one wants to mar with new delinquencies, so it's important to keep a close eye on payment due dates and to be sure not to take on more expenses than you can truly afford to pay. It can be helpful to keep a journal of all spending and expenses in order to analyze your financial habits and make positive changes.
Living on a budget and building a stronger credit history are both steps on the path to greater financial security.
Establish a Budget to Reach Your Goals
The good news is that new credit — if it's managed wisely — will have a positive effect on your credit score. Obtaining new credit can be an important part of getting a fresh financial start. After bankruptcy you can create a brand new budget to prioritize savings, avoid wasting money on fees and interest charges, and avoid future financial stress.
For some, even the mention of the word budget can cause anxiety. We understand these concerns. However, living within a budget is essential for your financial health and does not mean that you must deprive yourself of things that make your life happy and content. It's all about planning what you want to do with your money based on the things that are most important to you.
An effective budget allows you to take control of your money, see exactly how and where it is spent, and ward off any bad financial habits before there are any problems. A budget can be an excellent tool to help you reach your financial goals.
Build Up Savings
Sticking to a budget can have many rewards. One of the main benefits of effectively managing your money in this way is that you will be able to regularly put money into a savings account. The amount of money that you put into savings each month or pay period may not be as important as establishing the good financial habit of putting money into a savings account at regular intervals.
There are many ways to sock money away in savings. If you are employed and your employer offers a 401(k) or another type of retirement savings plan, you might consider signing up or increasing your contribution. If you are self-employed, you may want to look into opening an Individual Retirement Account (IRA). If you have a specific amount of money in your budget slated for savings, you can also have that amount of money automatically deducted from your checking account and placed into your savings account at the same time each week or month.
With no shortage of ways to save, you might find that you actually enjoy exploring all of the options and making the choice that is right for you.
Protect Yourself and Your Credit from Identity Theft
After filing bankruptcy, your mailbox will likely be filled with new credit offers, some that you might even find useful. When beginning to re-establish your good credit, you may become vulnerable to identity theft or other credit repair scams.
For this reason it is especially important to closely monitor your credit reports, as well as all credit and bank accounts.
If you become a victim of identity theft, you should notify creditors immediately, file a police report and file a complaint with the FTC. It is also a good idea to change all account passwords and PINs and notify creditors, even for accounts that are seemingly unaffected by identity theft.