Filing for personal bankruptcy is not the end of the world. Yes, it may have been a difficult decision. You’re embarrassed, but it was a necessary step that will shift your life into a better financial direction and turn your back on personal debt. You did it, so now it’s time to move on. But what do you do now?
You live your life, but with a few adjustments. According to the American Bankruptcy Institute, there were 766,698 total bankruptcy filings in 2017. This number is down less than 1 percent compared with 772,098 in 2016.
10 steps that will help you
After a bankruptcy, credit will be difficult to obtain. Follow these 10 guidelines that may help you re-establish good credit:
- Confront the cause of your bankruptcy. A self-evaluation may lead to a number of life changes.
- Create a budget and stick with it. Track your expenses for six months, and this will show you where your money is being spent.
- Relearn your spending habits and rely on cash. This forces you to buy only what you need.
- Build an emergency fund of six months to a year’s worth of expenses.
- Monitor your credit report. It may include errors that affect a number of things such as mortgage rates and job applications. Correcting the mistakes may improve your score.
- Get a secured credit card. It looks like a regular credit card, but is backed by a cash deposit you make into the account. Your credit limit is equal to the amount in the account.
- Always pay your bills on time. Every single one of them.
- Avoid scams from predatory lenders who may try to take advantage of you through loans with high interest rates. And at that, don’t seek money from a payday lender, which charges astronomical interest rates for loans.
- Stay healthy and feel good about yourself through exercise, eating nutritious food and having regular health check-ups. Doing so also may reduce your chances of medical expenses.
- Always look on the bright side of life. Having a good attitude and being persistent can boost your spirits.
Recovering from a bankruptcy will take time. You know that you will have a great amount of work to do in order to straighten things out and reestablish your credit. Just be patient, and things should work out.