Bankruptcy Is Not the End

So you had to file for bankruptcy. Unforeseen circumstances can cause this to be the only option. However, just because you were once bankrupt does not mean that your future is grim.

Bankruptcy is a hard choice to make. Millions of people have experienced it and come out on the other side. It won’t be easy, but you can recover from this type of financial disaster. Bankruptcy is not the end.

Your credit can be repaired after going through a bankruptcy. Start by paying your bills on time. If you filed for a Chapter 7 bankruptcy, your debt would have been wiped out along with some of your assets.

Be responsible with what you still have left. You still have your home. Make utility payments on time. Establishing a record of timely payments is one way to work towards fixing your credit.

After a few months, apply for a secured credit card. Secured cards require the cardholder to pay a deposit. This is the money that you will start with. Over time, you may qualify for an unsecured credit card.

Stick to one credit card and avoid making regular charges on it. Keeping the card for emergencies is a good idea. Having a credit card re-establishes your credit.

Train yourself to pay for everything in cash. Unless you have cash to back up a purchase, don’t buy anything; this could be one reason bankruptcy was filed in the first place. Going back to using cash is a healthy way to build up a bank account and savings account balance.

Create a plan for success. You have been bankrupt once so you don’t want to go there again. Divide discretionary money between savings and a fund for emergencies. Since your debt was wiped out, there should be no credit card payments to consider at this time.

Once you get that first credit card, companies will start hounding you. Don’t give in to them. Be flattered, but resist the urge to get started with the credit card debt cycle again.

Discipline yourself to live within your means. This includes saving for a rainy day. Consult a financial advisor or go to credit counseling. Credit counselors can give you information about money management and spending tips.

A financial advisor can take the extra money that you put in a savings account and show you how to invest for the future. One day you will want to retire. Retirement could last as long as twenty to thirty years. Having enough money to live out that portion of your life is important. Concentrate on that part of your financial future as you wait with patience for your credit to be re-established.

Bankruptcy is not the end of the story. People can recover from it and develop a healthy financial picture. However, it takes time and patience.