Without a doubt, bankruptcy carries the potential to provide you with the fresh financial start that you’re looking for. But if you’re like many people who are struggling with debt, you might have concerns about the long-term impact of bankruptcy. While it’s true that a bankruptcy will remain on your credit report for several years and can result in a dip in your credit score, there are concrete steps you can take to not only rebuild your credit score, but also rebuild your financial strength.
How can you obtain strong financial positioning post-bankruptcy?
Although you might face some obstacles following a successful bankruptcy petition, you can take control of your life and your finances in a way that you’ve been unable to all these years when you were overwhelmed with debt. Here are some steps you can take to rebuild your financial health and wealth after your bankruptcy:
- Build an emergency fund: A lot of people fall into debt when they’re confronted with a large and unexpected bill. To avoid that from happening to you post-bankruptcy, it’s important that you develop an emergency fund. That way if you have to go to the hospital, need a car repair, or suddenly lose your job, you won’t have to turn to high interest credit cards to help you get by.
- Stay current on all of your bills: Missing a payment on one of your post-bankruptcy debts can cause your credit score to take another hit, which you certainly don’t want. So, make sure you’re organized enough to consistently pay all your bills on time.
- Focus on rebuilding your credit: There are several ways to rebuild your credit post-bankruptcy. You can identify a co-signer to help secure loans, or you can use credit cards that are backed by collateral. Just be sure to exercise healthy spending habits so that you don’t get so far into debt that you struggle to make good on your repayment obligations.
- Seek stability: Maintaining a steady job and stable housing can provide you with peace of mind, help you rebuild your bank accounts, and show creditors that you’re consistent and reliable. Avoid job hopping and consistently moving.
- Create a budget: In life after bankruptcy, your focus should be on building and maintaining financial security. One of the best ways to do that is to develop a post-bankruptcy budget that’s realistic and gives you comfort and peace of mind. By sticking to this budget, you’ll find that there’s a way to meet all your debt obligations while still building up your bank accounts.
- Check your credit report: If you have debts discharged in bankruptcy, then you should check your credit report to ensure that they’re actually removed. If you don’t, then you could be dinged with higher interest rates and struggle to secure new lines of credit based on erroneous reporting.
Don’t be afraid to embrace the bankruptcy process
Personal bankruptcy can give you the new start that you’ve been longing for. We know there are some concerns with navigating the process, but there are also a lot of misconceptions out there. Don’t be fooled by misinformation. Seek out the facts so that you can make the decision that’s right for you. We’re confident that once you see the advantages of bankruptcy, you’ll be much more likely to embrace the process and advocate for the future that you want and deserve.
