Saturday, November 5, 2016

How to Get Your Financial Life Back on Track After a Bankruptcy

When your financial situation reaches the breaking point, it may become necessary to file for bankruptcy. Whether it is chapter 7 or chapter 13, bankruptcy can be a useful tool to relieve the strain of mounting debt problems. 

Even though this can often result in a loss of assets and a lengthy time of adjusting, at some point you must decide to pick up the pieces and start over. 

Here are a few tips to help you get started down the road to recovering your personal financial situation after a bankruptcy.

The 10-Percent Rule

As with all rough financial situations, a lack of funds and a tiny savings will only make the matter worse. 

The first plan of action to get your finances back on track is to begin to generate a sizable reserve to have for emergency situations. According to Bank Rate, saving 10-percent of your regular income is a good rule of thumb to help restore your financial reserves. 

By doing this consistently, you will empower yourself to make meaningful strides to become financially secure again.

Rebuilding Credit

Although your bankruptcy has done a number to your credit, it is important to begin immediately working to rebuild your credit as much as possible. 

The better your credit score, the more flexibility you will have while you bring your finances back to a functional level. 

To assist you in this endeavor, it may be necessary to speak with a consumer credit counselor to help you determine the best course of action to take to rebuild your credit in light of your current financial situation. 

Though it will not be easy at first, persistence is required to get what you desire as you reestablish your credit.

Borrowing Money May Be Easier After a Bankruptcy

When people imagine going through a bankruptcy, they often jump to the conclusion that no one wants to lend money to them for years to come. 

Although you will be viewed as a subprime customer, where rates and penalties will be higher, the truth is that many lenders actually see a person who has just finished going through bankruptcy as a safe bet.

One reason driving this perception is because current laws prohibit such individuals from filing a second bankruptcy for a number of years. 

This means the lending institution can get you at a higher interest rate and lock you in without the worry of you filing another bankruptcy any time soon.

Navigating the Murky Waters of Bankruptcy Law

Since a bankruptcy is such a life-altering experience, it is always a good idea to consult with a professional bankruptcy attorney from a firm like Lazaro Carvajal. to make sure everything occurs smoothly and that you are not hindering your own financial recovery efforts once the bankruptcy has been executed. 

A good bankruptcy attorney will not only hold your hand through the legal process, but they will be able to steer you in the right direction to begin your financial recovery efforts with the added experience of helping numerous other people in your diminished financial situation.

After bankruptcy has been filed can often be a scary, uncertain time for those undergoing this process. Rather than wasting time feeling bad about an uncertain financial future, it is best to focus on rebuilding your financial base as soon as possible. 

When you focus on making positive strides forward, this helps to leave the financial unpleasantness in the past.

1 comment:

  1. These are really great ideas to rebuild your finances. Hopefully, I won't ever have to experience this but it's good to know these tools are available if something ever happens.


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