Some people actually believe that filing for bankruptcy is an easy process and a way out from under the debt that is running their lives. While it can be a way out, it is not easy and should not be taken lightly. If you do have to file for bankruptcy, there are several steps you should take after the court proceedings are over to recover from the bankruptcy.
1. Understand that bankruptcy is a beginning, not an end.
Bankruptcy is tough and the stress from dealing with creditors has been running your life for many months. Instead of thinking of bankruptcy as the end of your world, think of it as a new start for you and your family. Your debts have been settled and now you can see the light at the end of the tunnel.
2.Take a class about managing your finances.
You may think you have learned your lesson and you will never get into debt like this again, but life comes at you hard and, sometimes, debt happens before you even realize it. By taking a class, you will learn the skills you need to design a budget and manage your income in a better way. Everyone has financial problems at some point in their life, but with new skills, you will be better able to handle those issues.
3. Start to rebuild your credit score.
The problem with trying to rebuild your credit score is that you need credit to build your credit. If credit cards were part of the problem before your bankruptcy, plan on getting a store credit card. That way, you will be limited on where you can use it and most stores have a lower credit limit so even if you use it often, you will not be digging yourself too deeply into debt. By paying the card on time, and in full, if possible, every month, your credit score will begin to go up. A small car loan is also a good way to rebuild credit, but only if you are sure you can easily afford the payments each month.
4. Do not accept lines of credit or major credit cards.
Financial companies know that you cannot file for bankruptcy again for several years, so they know you will be responsible for any debt you incur. While it may seem like a dream come true to have so many people offering you money, it will come with a very high price. Most of the time, the interest rates on this type of card or loan are extremely high and you could end up paying back two to three times the amount you borrowed.
5. Let go of the guilt.
Many people feel overwhelmed by guilt and disappointment after they have to file for bankruptcy. While this is normal, it is not doing you any good. You need to find a way to let go of all of the negative emotions you are feeling so you can move forward. If you are constantly feeling bad about yourself, you will not ready to move on from the bankruptcy and apply what you have learned about debt. Positive people learn from their mistakes and move on with their life. You will need to find a way to do this so you do not make the same mistakes again and end up deeply in debt.
6. Design a realistic budget.
This may be the hardest thing you will have to do to recover from bankruptcy. Most people have a monthly plan on when to pay their bills, but it is often unrealistic. When you design your budget, it must include everything you spend money on each month – right down to the cups of coffee you buy every day on your way to work. If this sounds too difficult, think about getting into debt and having to file for bankruptcy again. Write down every bill you have each month. Decide a realistic amount for savings, groceries, gas, clothing and insurances (these are often quarterly payments, but you need to figure them into your budget). Once you know how much you need to survive each month, you can easily build a plan that you can follow.
7. Check your credit report often.
After the bankruptcy proceedings are final, begin to check your credit report for errors. Make sure the accounts listed are yours and that there are no mistakes on your report. Mistakes can cause many problems when you are trying to rebuild your credit.
Rebuilding your life after bankruptcy will not be easy, but with determination, you can do it. Follow these steps and find your way back to financial freedom.