Life after bankruptcy can be challenging. While it allows you to regain your financial freedom, your credit is seriously impacted. Fortunately, this is only temporary, as the effects of filing bankruptcy will diminish over time. Additionally, there are steps you can take to help repair your credit score even quicker. Here are a few tips for achieving a successful recovery from the bankruptcy process.
How to Restore Your Financial Life After Bankruptcy
1. Create a Budget
Bankruptcy doesn’t wipe out every kind of debt, so you might be left with some financial obligations along with your everyday household expenses. Avoid falling into the same position you were in before by creating a budget that helps prevent you from overspending. Keep track of everything you owe each month to ensure no payments are missed, and allot a certain amount to set aside for an emergency fund.
2. Pay Your Bills on Time
Payment history accounts for a large percentage of your credit score. Therefore, you should be vigilant about making sure the bills are consistently paid on time every month. Even one late payment can cause a setback in the work you’ve done to turn your financial situation around. If you find it difficult to remember due dates, set up automatic payments through the bank or payment reminders.
3. Get a Secured Credit Card
Although the objective after bankruptcy is to steer clear of debt, using credit responsibly is the fastest way to improve your credit score. Once you’ve stuck to a budget for a while and proven you can make on-time payments, consider getting a secured credit card. This will give you the opportunity to start re-establishing a positive credit history, so you can soon obtain a traditional credit card or personal loan.
4. Monitor Your Credit Report
Keeping an eye on your credit report is essential when recovering from bankruptcy. If any old or incorrect information is showing up, it can hinder all the effort you’re putting into raising your score. Make sure all of the details listed in the report are current and accurate. Should you notice any errors, report it to the corresponding credit bureau right away and have them fix it.
When you declare bankruptcy, you’re essentially taking a hit to your credit now, so you can work toward a financially healthy future. If you have questions about filing bankruptcy and what to expect in the aftermath, don’t hesitate to contact The Gil Law Firm. For nearly two decades, the Dothan, AL-based legal practice has been helping clients throughout Alabama, Georgia, and Florida eliminate debt problems and get their lives back on track. Call (334) 673-0100 to discuss your financial goals with an experienced attorney, or visit them online to learn more about the different bankruptcy options.