Bankruptcy can be a much-needed lifeline for a person struggling with the stresses of unmanageable debt. While it's no secret that an individual's credit score will usually take a hit after the initial filing, the benefits of bankruptcy outweigh this drawback for many people, who now have a clean slate to restart their financial lives. You can then start taking steps right away to repair and rebuild your credit; below are few tips to help in this process.

How Can You Improve Your Credit After Filing for Bankruptcy?

1. Open a Secured Credit Card

In the few first months post-filing, you may find it difficult to get a new credit card. Those you do qualify for will likely come with low limits and high-interest rates or finance charges. Instead, open a secured credit card. This essentially functions as a debit card, but it is issued by a major bank and counts toward your credit standing. You prepay a balance, then spend off that balance whenever you use the card. Use it to make small purchases, and reload the card with a new deposit every month.

2. Check Your Credit Report

A filer's credit report should show zero balances for all those debts discharged in bankruptcy. After you receive notice of the final discharge from the courts, check for any errors. If the report still shows you owing money on dismissed debts, it will be reflected in a lower credit score. Report the error to the credit reporting agency right away; the major bureaus allow you to do this online or by phone.

3. Budget Carefully

Now is the time to utilize the lessons you've learned from bankruptcy and put a solid budgeting plan in place. General wisdom says individuals should devote 50 percent of their income to essentials like housing and food; 30 percent to wants, like recreational activities, and 20 percent to savings. Modify this as necessary to fit your current income levels, but be vigilant about sticking to the budgeting parameters you set. Even small changes, like taking lunch to work, making coffee at home, and clipping coupons, can add up to extra savings in the long run.

If you're considering filing for bankruptcy, the Sam Turco Law Offices are here to help. Since 1992, Attorney Turco and his team have been serving clients in Omaha, Lincoln, and throughout the state of Nebraska. They offer representation in both Chapter 7 and Chapter 13 bankruptcy cases. To schedule a free bankruptcy case audit, call (402) 614-7171 or visit their website for more on their offerings.