Wednesday, January 6, 2021

How to Recover After Filing for Bankruptcy




The decision to file for bankruptcy isn’t an easy one. In many situations, it’s the best option, but that doesn’t mean it will be easy. After you file, you’ll need to work to fix your credit and bring your financial situation back into a healthy balance.

Get Comfortable With Your Credit Report


Monitoring your credit will be important following a declaration of bankruptcy. You’ll want to make sure the bankruptcy effectively removed all debt. Otherwise, it could continue to affect your credit score. Look over the report at least once a month.

Start Building Credit


To develop a healthy relationship with your finances, you’ll need to begin responsibly using credit. A recent bankruptcy will limit your options, but you should be able to get a secured credit card. 

This type of card allows you to use your own money as collateral, removing any risk on the part of the lender. The collateral is usually a few hundred dollars. Having it will allow you to practice using a reasonable amount of credit and then paying off the balance each month. 



Always keep the balance low as this is part of what will determine your new credit score. Start with one line of credit for now, and slowly build over time. You don’t want to add too many new accounts at once. It lowers your score.

Consider a Bankruptcy Attorney


Bankruptcy law can be confusing. A good bankruptcy attorney can guide you through the process and can help guide you through the next steps. Along with helping you decide what type of bankruptcy filing is best, the attorney will also handle calls to creditors and ensure you file all paperwork correctly.

Practice Good Behaviors


Bankruptcy provides a fresh start, but it’ll be up to you to make use of it. If you continue to make the same financial mistakes, you’ll end up back in a bad situation or possibly even be worse off than before. 

Be sure to pay all bills on time, follow a budget, and live within or even below your means. The more money you can put in savings, the less likely you are to go further into debt in the event of an emergency.

Complete recovery from bankruptcy isn’t easy. At times, it can feel impossible. However, with hard work, dedication, and a lot of patience, you can learn a new financial skillset and move forward into a much better future.




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