4 Tips for Starting Over After Bankruptcy

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Filing for bankruptcy can provide you with a fresh financial start. But recovering after bankruptcy isn’t always easy. Knowing how to start over after bankruptcy can help you build a solid financial future. Contact Loan Lawyers today to learn more about what to do after bankruptcy to take charge of your finances.

1. Save Your Paperwork

Although you may want to put your bankruptcy behind you as quickly as possible, saving any paperwork from your bankruptcy case is essential. You may be asked for copies of your bankruptcy notices or files — especially when applying for large ticket items such as a car loan or mortgage after bankruptcy.

Your bankruptcy paperwork will also be handy if a creditor or collection agency approaches you about money owed. If your bankruptcy included that specific debt, you could easily prove that your bankruptcy was discharged and you no longer owe that money.

2. Create a Budget

Knowing how to manage your money is critical to helping you establish good financial habits with your day-to-day spending. One way to do this? Create a budget.

However, creating and sticking to a budget may sound challenging. To set yourself up for budgeting success, you must have a plan. First, understand where you stand now. Take an inventory of your income, savings, spending, and debt. Then, create a financial plan for life after bankruptcy.

For example, you may choose to use the 50/30/20 method of budgeting. This budget assigns 50 percent of your income to needs, 30 percent to wants, and 20 percent to savings. After budgeting, you may find you need to cut back on spending or get a side hustle or part-time job to bring in more income. 

3. Save Money for Emergencies

Building an emergency fund is another way to create healthy financial habits after bankruptcy. When unexpected expenses pop up, emergency savings can help you avoid landing back in debt.

Even with the necessity of an emergency fund, 56 percent of Americans don’t have enough savings to cover a $1,000 emergency expense – causing stress and increasing debt. Don’t put off saving money for emergencies. Even if you only have a small amount to fund an emergency savings account, saving is key to helping your fund increase over time.

4. Check Your Credit Report

When you filed for bankruptcy, you probably saw your credit score dive. Your credit score increases as old credit accounts drop off your credit over the next seven or ten years, depending on if you filed Chapter 7 or Chapter 13. 

However, make sure your credit reports note which accounts are included in your bankruptcy. You don’t want an overdue credit account floating around, causing more financial havoc. Check your credit report regularly to help track your credit accounts and reduce reporting errors. 

Things to Avoid After Filing Bankruptcy

Part of knowing how to recover after bankruptcy is understanding what not to do. Some things to avoid when recovering from bankruptcy include:

• Avoid credit repair scams
• Avoid payday lenders
• Avoid taking on additional debt
• Avoid repeating past financial mistakes

Taking proactive steps to repair credit and improve your financial situation can help you pave the way for a more solid financial future.

Talk to Our Experienced Bankruptcy Lawyers in Fort Lauderdale, FL Today

If you’re considering filing for bankruptcy, you’ll want an experienced debt solution law firm with a proven track record of success on your side. To gain control of your debt, don’t hesitate to call the experienced bankruptcy attorneys at Loan Lawyers to discuss your options and how we could help.