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Rebuilding a financial life after a Chapter 7 bankruptcy

On Behalf of | Apr 9, 2019 | Chapter 7 Bankruptcy |

Financial problems are nothing unusual for consumers here in Texas and elsewhere. Debt can get extremely overwhelming and, for many people filing for Chapter 7 bankruptcy, could provide relief from the situation. What makes several of them hesitate is thinking that doing so would end their financial futures, but that is not true. In fact, it does not have to be an end, but instead, a beginning.

Rebuilding credit after a bankruptcy is entirely possible. Yes, it will lower an individual’s credit score, but ordinarily, by the time someone files, the damage is already done. The bankruptcy usually stops the downward spiral and provides a chance to recover. Even so, a Texas resident dealing with these circumstances needs to approach the situation with a plan in order to take advantage of the fresh start receiving a discharge can give him or her.

A good start would be to build an emergency fund since unexpected financial obligations can arise at any time. Creating a budget can help put that money in the bank and keep expenses on track. Doing so requires a thorough review of the current financial situation. Looking at what comes in versus what goes out, finding places to reduce spending and living within one’s means is a good beginning.

It takes time to rebuild a credit score, and it usually requires using credit wisely in order to increase an individual’s credit score. This could happen through a secured credit card, a secured loan, or a co-signed loan or credit card. One could see a rise in his or her credit score by making on-time payments and keeping balances low.

Going through financial problems causes stress, frustration and even health problems. Chapter 7 bankruptcy can provide relief from these effects and give an individual the opportunity to start over financially. For those who find themselves in this position, finding the right advice and assistance could increase the chances of making it easier to get through this time in their lives.