Going through bankruptcy isn’t easy. It can be stressful and confusing, but when it is handled correctly, it can lead to a hopeful future directed by clear financial planning. Life after bankruptcy can be a happy one since the previous burdens have been lifted. Once the case has been finalized, it is time to take steps to move forward.
So, how do you start over after bankruptcy?
In a word, slowly. You don’t rush into any more financial obligations, and you design a budget that you can stick to. Whatever caused the need for bankruptcy, whether it was medical bills, credit cards, or loss of employment, must be under your control now so that a successful financial future can be written on your clean slate.
If you filed Chapter 7, then a discharge order from the court will let your creditors know your debts with them have been wiped out. If you went with Chapter 13, then it is critical to stick with the repayment schedule set up.
So, What Happens After Bankruptcy?
A benefit to filing for bankruptcy is that your creditors cannot harass you for payments any longer. If they still try to, let them know you can supply your successful bankruptcy case number as evidence that you don’t have to pay them. They also cannot continue to garnish your wages, if that had been in place.
A major change after filing for bankruptcy is the effect it has on your credit score immediately afterward. If you need to apply for major purchases, you may be denied, or a co-signer may be required. When you fill out job or rent applications that ask about credit history and bankruptcy, it is best to be open about why you needed to file. The impact on your credit score will lessen as years go by and you build a new history that displays timeliness and reliability.
So, What are Some Tips to Recover From Bankruptcy?
Take advantage of your new beginning by not falling back into old patterns. If credit cards were an issue, be careful about applying for new ones and charging more than you can afford to pay off. Getting a new credit card will help build your credit back up, but you will either have to go with a high-interest one or a pre-paid option. Showing that you can spend responsibly and pay reliably will have a positive impact on your credit. This will also begin a pattern that is beneficial to your post-bankruptcy budget and financial lifestyle.
Smothering medical bills are a common reason for filing for bankruptcy. Now that they have been wiped out, design a budget that allows you to live within your means. Set aside savings with part of the money that used to go for those bills. There are many tools you can use for budget planning including online templates. You can also speak with professional advisors.
Paying your bills on time will build up your credit score. Every month that goes by that you pay all your accounts on time quickens the timeline for your score to increase. The bankruptcy itself can stay on your credit history for up to ten years, but if you are on time with all your payments for all your accounts, your credit score can increase much sooner.
Related Questions
Can Debt That is Discharged Come Back After Bankruptcy?
Your case will include a list of qualified creditors whose debts are wiped out by bankruptcy. A debt that is part of your case usually cannot come back after the judge signs the discharge order. Debt that is not included in the case or taken on after the bankruptcy does not enjoy the benefit of being wiped out.
Should You Get a Credit Report After Bankruptcy?
After you have applied for a new credit card and have been paying your bills on time for a few months, it is a good idea to get a free copy of your credit report. This will give you a starting place from which to build. It will also let you know if you need to dispute any incorrect information. Just remember that things take time with creditors and credit institutions.
Final Thoughts and a Financial New Beginning
Life after bankruptcy can be sweet. There can be more money for your budget, fewer calls from creditors and a growth of your credit score as the years go on.
Don’t know how to start the bankruptcy process and start over? Hines Law is here to address your inquiries and assist you in discovering a debt resolution that suits your needs. As a specialized bankruptcy firm in Massachusetts, we focus on Chapter 7 and Chapter 13 cases for individuals burdened with overwhelming debt and facing financial difficulties.
We offer guidance and support during this stressful time, so that you can feel secure about starting over. Talk to one of our bankruptcy attorneys today to explore your options. Free!
If you are ready to take control of your financial situation, filing for bankruptcy is about doing just that and you don’t have to do it alone.