On behalf of Law Offices of Kathleen G. Alvarado on Thursday, June 28, 2018.
Filing for Chapter 7 bankruptcy does not mean a life sentence of money problems. In fact, you can start to rebuild your finances the day after filing. By creating a strong financial plan you can decrease the risk of falling back into your old ways. Even though the road after bankruptcy can appear daunting, it is critical that you rise to the challenge to take back control as soon as possible.
Here are some things that you can do to reorganize your finances and hold yourself accountable when it comes to your spending habits.
Take charge of your credit.
When you file for Chapter 7 bankruptcy, your credit score will suffer. The higher your score is when you declare, the bigger of a drop you will see. However, don’t despair. Statistics show that 43 percent of debtors will have a credit score over 640 within the first year after the declaration. After two years, 65 percent of filers will join them.
You can build credit in a number of ways. You can consider taking advantage of easy credit such as department store cards and credit with case stations. Setting up recurring charges on other credit cards, paying them in full and on time can also be useful. Doing these things can help to increase your credit score and get you on the right path.
Create a budget that you can stick to.
Your initial downfall could have been due to your inability to adhere to a budget. When you begin to place constraints on your spending, you can have a better idea of where your money is going. Prioritize necessities over wants and make sure to set realistic goals for yourself. It may take time to pick up this habit, but it is imperative that you do so.
Consult with financial professionals.
To avoid taking on more than you can handle, you may choose to speak with professionals. You could speak with a financial planner to receive counseling. You can also consult with an attorney who can provide you with insight on life after bankruptcy. Doing this can help to prevent you from falling into the same routines that led to your downfall in the first place.
Be honest with yourself. You will not be able to reverse the damage that has been done overnight. Feeling ashamed and putting yourself down may affect your ability to overcome these obstacles. Maintain a positive attitude and you will have a better chance at obtaining financial success and coming back ready to fight.