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Five tips to help you recover from personal bankruptcy

So you have just filed for bankruptcy. Now what? You may feel very overwhelmed at the uncertainty of your financial situation. You have spent your whole life trying to build a great credit ranking and now you face an uphill battle.

First thing you need do is take a deep breath and realize that there is life after bankruptcy. It will be different, and sometimes more difficult, then when you first started building your credit. However, if you strategize and commit yourself to not wasting your second chance, you will find the experience very rewarding.

Here are some tips on how you can recover from filing from bankruptcy quicker and without the burden of your recent bankruptcy filing.

  1. Make a budget– This seems simple but making a budget will help you plan out your financial situation much easier than without it and it is essential to getting yourself back on track.This might help you realize that you need to stop spending on certain things or you may realize you have some extra cash to help pay off your bills earlier than you had imagined. Your essentials should always be: housing, food, utilities, communications, transportation and medical expenses. If you want to make a big purchase, make sure you have enough money to pay your bills first.
  2. Make an emergency fund – You should consider also putting money into a emergency fund. Emergencies happen: you may need to take a trip across the country to go to a funeral, your car may break down or your house might get hit by a huge storm. Always plan for emergencies.
  3. Pay your bills – Your first priority should always be to pay your current bills in a timely manner. If you have a hard time remembering paying your bills, set up automatic bill payments. Most utility companies will allow you to do a direct deposit payment on the day you choose.
  4. Get a secured credit card – Having a secured credit card will help you boost your credit score in no time. You will put money up front (usually about $500) and make normal payments on your credit card like you have always done. Ask to get your credit line raised as soon as possible. Three things to keep in mind: ask yourself if you want to stay at this bank if you were to switch to an unsecured credit card, avoid places that charge you upfront fees (some will charge you up to $200 when you first open your card), and make sure they will report your transactions to all three major credit bureaus.
  5. Upgrade to an unsecured card – After you have your secured card for about 12 months, ask to be upgraded to a unsecured card. But keep the same philosophy as before: do not spend money you do not have. This will land you back into bankruptcy in no time.

If you need help recovering from personal bankruptcy, contact Leslie Williams. We’ll set up a  and help you start moving forward—debt-free!

14 replies
  1. ARCpoint Woodbridge says:

    I like that the first thing you suggest after filing bankruptcy is to make a budget. I hope that when an individual goes through bankruptcy that they are taught tools to help avoid the same issues to continue though.

  2. Leader One Financial says:

    Emergency funds are great! I know a few years ago when I was having issues, we were able to tap into the fund that we had been building up and setting aside strictly for that. Though it didn’t feel good to have to clean it out, it was really nice not having to put anything on my credit cards.

  3. Chavita says:

    I’m an attorney in California and I prtcciae in the area of bankruptcy law. If your bankruptcy case is dismissed for any reason, it is as if the bankruptcy was never filed. So yes, they could reinstate interest charges that would have accrued during the bankruptcy.Dismissing a bankruptcy has the potential to create some problems for you under the new laws if you decided that you need to refile in the future. I would carefully review your situation with a qualified bankruptcy attorney before withdrawing the petition.You can dismiss a Chapter 13 bankruptcy at almost anytime. Dismissing a Chapter 7 is much hard and requires court approval with an appropriate motion.

  4. Susu says:

    I too have filed bankruptcy and my atetrnoy told me that it would take some time to rebuild your credit. It’s not going to happen over night. You can apply for credit but you may or may not get a good interest rate. When you filed did you enclose everything? In my case, I did not include my truck and a student loan because I wanted to have something to build on. The one thing my atetrnoy did say was do not apply for credit cards. Hope this helps.

  5. mmccoy says:

    When you file for relief under the bankruptcy code, you are required to include all of your debts in your bankruptcy. However, if you are current and would like to keep your vehicle, it is sometimes possible to reaffirm on the loan, thereby helping to build your credit. Student loans are almost always non-dischargeable, but staying current on the payments will help your credit in the future. Most people will receive credit cards in the mail immediately, as creditors understand that you will not be allowed to file bankruptcy again for a period of time. However, I would not recommend obtaining credit cards again after receiving your discharge.

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