5 Steps in Recovering From Bankruptcy

Saturday, April 26, 2014, PM | Leave Comment

Although bankruptcy is often considered a cataclysmic financial event, it can also allow families to start over instead of being saddled with a mountain of debt they cannot pay. These steps can help you to recover successfully from bankruptcy and allow you to reset your financial goals on a fresh course.

5 Steps in Recovering From Bankruptcy

  1. Do A Major Self-Assessment

    You probably know the financial problems that caused the bankruptcy, but it’s a good idea to take a moment to review your lifestyle choices and basic needs to determine where you can downsize your expenses. This simple action can help you immeasurably to rebuild your financial standing for the future.

  2. Take A Personal Financial Management Class

    You may be an adult that has been managing his own affairs for many years until the bankruptcy came into the picture. Look at the financial reset as an opportunity to hone new skills by taking a personal financial management class.

    You can also get advice from a bankruptcy law firm so that you make sure you minimize damage during the process. You will increase your knowledge of credit practices, saving, investing and other matters that can help you be more financially secure in the future.

  3. Secure New Credit Thoughtfully

    Your ability to make sound financial decisions in the future will depend on restoring a good credit record. A secured credit card will allow you to have a set amount to spend on credit.

    As time passes, you can then apply for a store credit card. Pay these amounts off religiously, and you will soon be eligible to have a traditional credit card for purchases. Making regular payments on these accounts will restore your credit rating for future financial decisions.

  4. Pay Your Bills On Time

    As you begin to rebuild your credit record, it’s important to get into the habit of paying all bills on time. This action can reinforce good habits for your own financial well-being, and it can also show potential creditors that you have learned from past mistakes and can be trusted to make good decisions about purchases in the future.

  5. Delay Making Major Purchases

    If your old car is able to run a few more years, keep it and wait a few years to purchase a new car. Keep your credit needs simple for as long as you can to build a good credit rating.

Bankruptcy does not have to ruin your credit for the rest of your life. With these steps, you can re-establish a good credit record and create a new foundation for your future financial plans.

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