Chapter 7 bankruptcy eliminates most types of unsecured debt, a process that has given millions of individuals a second chance at a brighter financial future. In the initial aftermath of filing for bankruptcy, one's credit score will take a hit, and securing new lines of credit may seem like an impossibility. During this time, it's important to understand that there are ways to bounce back — below are four tips for doing just that.
4 Tips for Recovering After Chapter 7 Bankruptcy
1. Lean on Family & Friends
Following declaring bankruptcy it may feel like your financial stresses are too much to bear. This is totally understandable and something that most bankruptcy filers can relate to. During this vulnerable time, lean on trusted family members and friends. Talk openly about your financial fears and worries, ask for advice and guidance, and surround yourself with supportive people and energy. You're not alone.
2. Pay Bills Promptly
Don't wait until the last minute to pay your bills. Get in the habit of paying them as soon as they come in. Staying organized can be incredibly helpful in this regard. Keep an inbox or file folder with all bills to be paid, and a separate outbox or folder for bills that have been remitted.
3. Create a Budget
In the uncertain territory following a Chapter 7 bankruptcy, a budget can be your best friend. Take the time to make a list of all your existing monthly financial obligations. Then, list all your income. Plug the money coming in to the costs that will take money out. Be thorough, and always try to set aside a little for emergency use. The hardest part is always sticking to a budget, but in the wake of bankruptcy, it’s essential to do so.
4. Open a Secured Credit Card
Right after a bankruptcy discharge, it will be difficult to get approved for an unsecured credit card. But to start strengthening your credit right away, consider applying for a secured card instead. This works like a debit card, in which you spend off of a prepaid balance, but it has the added bonus of building your credit. The sooner you start rebuilding, the better shape your finances will be in moving forward.
By following the above tips, you can weather the uncertainty that follows a Chapter 7 bankruptcy. If you're considering filing, know your legal options by contacting the Law Office of James B. Mallory III. Attorney Mallory has nearly 30 years' experience serving Chapter 7 and Chapter 13 bankruptcy clients in Iredell County, North Carolina. Call (704) 872-1911 or visit him online to schedule a consultation.