Filing Chapter 7 or Chapter 13 bankruptcy allows many individuals and families to finally breathe easier. From the elimination of harassing debt collection efforts to the discharge of eligible unsecured debt, people can rest easier knowing they have gained a fresh financial start. Are there things they can do, however, to speed up the healing process?
Here are four tips that can help people rebuild their credit rating and strengthen their financial outlook.
- Watch your credit report closely: After the bankruptcy process has finished, it is wise to continue monitoring your credit report. Immediate benefits include identifying any accounts that should have been closed and shutting them down. Additionally, individuals might begin learning more about how certain actions and spending habits can positively and negatively influence the overall credit score.
- Build a budget and stick to it: It might be easier said than done, but after facing financial trouble, it is wise to carefully evaluate your monetary situation and take steps to ensure it doesn’t happen again. This can directly translate to creating a budget based on your income and sticking to it without question. Eventually, you can start building a savings cushion to absorb financial emergencies in the future.
- Build your credit back up: It is wise to start small and build your credit back up. Whether this means getting a secured credit card or sticking to a card with a low available balance, it is important to control your spending.
- Pay attention to your payment history: It’s no secret that you find yourself in a precarious position. In the foreseeable future, you should take whatever steps you can to ensure you make your payments on time or slightly early. Late payments can devastate your fresh financial start. From marking a special calendar in red ink to remind you when a payment is due to setting a phone or computer reminder to make a payment, you should take an active role in the process.
While many people consider bankruptcy a last resort, it doesn’t mean that recovery isn’t possible. The bankruptcy process is two-fold: debt discharge and future stability. Take advantage of your fresh financial start and build a more stable future.