Filing for bankruptcy can feel like you hit the financial equivalent of rock bottom. While it does wipe out your old debt, it does stay on your credit report for 7 to 10 years. This can hurt your long-term chances of qualifying for a mortgage or other credit.
This comes with the question of what life after bankruptcy look like. There will be hardships that you will have to endure, but it is possible to financially recover from bankruptcy and give yourself a fresh start.
What to do After Filing For Bankruptcy
It is natural to want to put bankruptcy behind you as quickly as possible. To ensure you get yourself on firm financial footing and to help ensure you don’t run into serious financial trouble in the future, it is important to create a solid financial foundation. Here are some tips to help you with this:
Save all paperwork from your bankruptcy case.
While it might not seem like a critical step, you should save all the paperwork from your bankruptcy case. You may be asked for copies of your bankruptcy in the future, especially when applying for a mortgage, loan, or other financial products. This can also help if a debt collector contacts you about a debt the youth that was discharged in bankruptcy. If it was discharged, then you will have hands-on proof that it was.
Start saving money and build a budget.
To help you ensure that you don’t have to file for bankruptcy again, it is important that you establish good financial habits. This could mean starting a savings account that you can access during financial emergencies and creating a budget that you can use to manage your income and expenses and guide your day-to-day spending. Having these steps can help ensure that if anything were to happen, you have something to fall back on.
Reestablish good credit.
Reestablishing a solid credit score is an important part of your path to financial recovery after bankruptcy. One of the best ways to approach rebuilding credit is to pay your bills on time. Your payment history accounts are 35% of your overall FICO credit score. By making timely payments on any remaining debts, you can show that you are dedicated to financially recovering. This will also ensure that your credit score will improve, which can open up the opportunity to have a secured credit card or even other things that need credit.
Filing for bankruptcy can be an emotionally draining experience. We know that it is a decision that you shouldn’t take lightly. It is why we suggest reaching out to a bankruptcy lawyer like our friends at The Law Offices of Ronald I. Chorches for more information about what to expect during this process and how to recover after it.