If you are considering filing for bankruptcy, you may be wondering what your life will look like after, and how you will be able to regain your financial health. Depending on the type of bankruptcy you file, you may have all of your debts wiped out (Chapter 7) or have a repayment plan for all of your debts (Chapter 13). Most people know that a bankruptcy will remain on your financial reports for seven years. While having lower credit can affect your ability to purchase a home or vehicle, there is still good news. If you are concerned about filing for bankruptcy because you are unsure of what your life will look like afterward, read on to discover how you can rebuild your credit and your financial health.
Create a Financial Budget
The truth is that your credit score will initially take a big hit after bankruptcy, but it will start to rebuild immediately. If you can create a budget by which you live beneath your means, and stick to it, you will prepare yourself for a financial track that will lead you to create a fiscally responsible and healthy lifestyle. Many people file for bankruptcy more than once in their lives due to the fact that they do not create and stick to a practical budget. Consider visiting with a financial specialist, or use tools found on financial websites, to learn how you can formulate a financial budget that will create a stable financial future.
Learn to Save
As you create your financial budget, make sure to allocate a portion of your income to savings. If you make the decision to create a savings account, you will be adding a layer of financial security in case any emergency. Building a nest egg can help you if you need to either save for a particular item in the future, or if a financial emergency occurs.
Get a Secured Credit Card
After bankruptcy, some credit cards may offer you credit after your discharge, but many credit card companies will not allow you to have a credit card. However, a secured credit card will allow you to deposit money into an account, and then use a credit card for your purchases. Using a secured credit card can help you build your credit and increase your credit score. Eventually, you may be able to qualify for a high-interest credit card, which you can use sparingly, and always pay off monthly to rebuild your credit.
You will have the ability to pull your credit score from all three credit bureaus each year for free. However, some companies will provide a service that you can continually track your credit score. Doing so can ensure that you are staying on top of your credit, making sure to check for any errors, and see how your hard work is paying off. Don’t get to caught up in your credit score. Remember, the goal is to be better off financially with less debt and more assets.
Become an Authorized User or Co-signer
If a friend or family member will allow you to become an authorized user on his or her credit card or co-sign on a loan, this too can help you rebuild your own personal credit. Payments must be made consistently, and timely every month.
Contact an Experienced Bankruptcy Attorney
If you are considering filing for bankruptcy, you may be concerned how bankruptcy will affect your financial future. Contact an experienced bankruptcy attorney as soon as possible to help you understand your rights, and how you can best ensure your financial security during and after bankruptcy. Contact Dworken & Bernstein by calling 440-352.3391 or online today for your free consultation.