4 Things You Must Do To Smoothen Your Life After Bankruptcy

After a court declares you bankrupt, you will have to face some tough challenges. Bankruptcy is going to be on your record for the next 7 to 10 years, which means the recovery process for you is going to be very difficult and time consuming. In order to smoothen the quality of your life after bankruptcy, you must do these four things. These 4 steps will help you face the challenges quite efficiently. Here you go.

Follow A No-Frill Lifestyle

What kind of lifestyle changes you have to implement will depend on the type of bankruptcy that has been granted to you. Chapter 7 helps you get rid of most of your debts, but at the same time, it also takes most of your assets and properties. If you are in job, your salary is yours. Besides that, your retirement fund and other benefits, such as a pension plan, also remains safe. But, since your credit report will keep showing the entries of bankruptcy for the next 7-10 years, you must start using cash for most of your purchases. Do not acquire more debts. In fact, it will be very difficult for you to qualify for any loan program at the first place. If you still manage to qualify for loans, you will be charged a much higher rate of interest than usual. Under chapter 13, you will be able to keep all your assets but you will also be liable to make the repayment on your debts (on comparatively much easier terms as approved by the court). It means you will have to be more careful with your finances. In most cases, it means implementing some big changes in your lifestyle. You will have to reconsider how much you should pay for shelter and how much you should spend on clothing. Having a can prove to be very helpful.

Repair And Rebuild Your Credit

Life after bankruptcy can be quite smooth if you manage to build a good credit once again. Here’s . The faster you do this, the faster you will be able to recover your financial situation. Your strategies however will mainly depend on what kind of resources is available to you. For example, if you still have your home and you are paying the mortgage on it in a timely manner, it will result in some quick growth in your credit score. Likewise, you have an edge if you have a high-dollar monthly income. Besides that, you can also consider obtaining a credit card with small limit and then paying it off in full every month.

Do Not Make Further Defaults – Be Current With Your Bill Payments

You do not have to repeat the same mistakes again, especially the ones that were responsible for your bankruptcy. Make sure you are current with your debt payments. Follow a well-structured budget and stick to it. You will have to show some great financial discipline. Making further defaults will only make your life after bankruptcy more difficult.

Create An Emergency Savings Fund

Financial emergencies may come any time; they do not send a notice in advance. It means if you do not have an emergency fund, you may be tempted to borrow payday loans to meet those urgent unexpected financial needs. These payday loans are easily available to even those people who have the worst credit in the world, but if you do not make the repayment in time, these loans can push you into a horrible debt trap, which is likely to completely break the backbone of your finances. So, make sure while you are doing other things, you also implement certain strategies to create a healthy emergency fund. Here’s the action plan on .

The most important thing is that you must show a positive attitude. Life does not end with bankruptcy. If you follow these four steps and implement your strategies thoroughly while showing some great financial discipline, you can definitely recover your . But remember, do not look out for any magic wand; there is none. The recovery process will take some time. How fast you achieve good results will depend on how serious and consistent you are in your efforts.

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Posted in Bankruptcy, Life After Bankruptcy | 1 Comment »

One Response to “4 Things You Must Do To Smoothen Your Life After Bankruptcy”

  1. Robert says:

    Very wisely described. If you follow the above mentioned tips, it is sure you will make your life smooth. Bankruptcy makes your life totally changed. It does depend upon one’s attitude to get back to his/ her normal life. It is true that life must go on even after bankruptcy. Life style has to be changed to some extent but it may be for a short span of time. Once you repair your credit score and improve the financial status, your life will come back to normal. The most important thing is to improve your credit score after insolvency; it will create the trust in the creditors about you. Budgeting will also help to get out of this situation. Cover all the possibilities in your budget plan so that the unexpected emergencies can not spoil your budget. You have to be very punctual for making your payments. You can not afford any default in payments. If you have patience and follow the steps given in the article, you will be back to your normal routine very soon. But remember one thing, it will not happen in a day or two, the whole process will take time.

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