Bankruptcy can give anyone who has accrued significant debt an opportunity for a fresh start. While it will take some time to regain your financial footing, lasting debt relief and credit recovery are possible. Here are the steps you’ll need to take to get there.  

5 Strategies for Bankruptcy Recovery

1. Assess Your Past Spending Habits

First, identify what got you into financial trouble in the first place. Perhaps you were spending more on your credit card than you could afford, and the debt began accumulating. Or maybe you took out a loan and didn’t generate enough income to pay it back. Learn from past mistakes to avoid them in the future.  

2. Check Your Credit Score

Before you can determine how to improve your credit, you must first assess its current condition. Check your credit score through one of the three trusted credit bureaus—TransUnion®, Equifax®, or Experian™— by visiting AnnualCreditReport.com. While your bankruptcy will appear on reports for a decade, checking your score monthly allows you to watch for red flags and stay on track with debt relief.

3. Develop a Realistic Budget

Now is the time to start budgeting. Tally up your monthly expenses, including debt repayment, if applicable, and compare that with your income. Set strict limitations for nonessential expenses, such as dining out.

4. Start Building Up Savings

Whatever is left over each month after you’ve paid your bills should go directly into savings. If it’s within your means, consider having some of your paycheck deposited directly into a savings account so you won’t be tempted to spend it.

If you’re working to pay off past debts, you may not be able to start saving right away. Set small future goals, such as saving a bit more each month. Having savings will help you avoid more debt if any unexpected expenses arise.

5. Begin Reestablishing Credit

While credit cards may have been a component in your financial troubles, using them wisely can help you rebuild your score. Only charge what you’re certain you can pay off entirely. You may not be able to get a card through previous lenders, so look for a different issuer and start with a secured credit card, which offers low fees and strong approval odds.

If you’re struggling with your finances and seeking a debt relief solution, turn to Greg Dunn, Bankruptcy and Debt Relief Attorney. Located in Honolulu, this legal professional offers experienced bankruptcy representation to enable clients to regain their financial footing. He has helped more than 12,000 people navigate debt issues. Explore your bankruptcy options online, or call (808) 524-4529 for a free initial consultation.