No one wants to file for bankruptcy, but sometimes starting over with the clean slate is the only option available. If you are deep in debt and see no real way to climb out of that hole, filing for bankruptcy protection may be your best option.
Unfortunately, the results of a bankruptcy filing are long lasting. Even years after the filing is complete and the debts have been forgiven, you will probably find it difficult to get a mortgage, qualify for a loan or even get a credit card. Taking the right steps immediately after the bankruptcy filing is the best way to start rebuilding your credit and recovering your good name.
One of the most important things to do after filing for bankruptcy is to let go of the shame and guilt. It is easy to feel guilty about filing for bankruptcy, but the bankruptcy laws are there for the protection of consumers. You may not be able to change the past, but you can change what you do in the future.
Whether you went through a chapter 7 bankruptcy process or sought protection somewhere else in the country, it is important to discuss the implications with your attorney and financial counselor. A bankruptcy filing will stay on your record for some time, so it is important to be prepared for the long term implications.
Going forward, it is important to develop a comprehensive and realistic family budget. Paying your bills on time will be extremely important now, and doing so is the best way to rebuild your shattered credit.
Make a list of all your household expenses and compare those expenses to the income you have available. You may need to cut back on everything from eating out to cable TV and cell phone service, but trimming your expenses is vitally important at this point. Making sure you can pay every bill in full and on time will help you rebuild your credit and get back on your feet more quickly.
As you go forward, you can check your credit score to see how you are doing. Do not be discouraged if your credit score stays low for a long time – this is normal after a bankruptcy filing. Over time, however, you should see some improvement as you continue to pay your bills on time and avoid debt.
A secured credit card may also help you rebuild your credit and recovery from a past bankruptcy filing. Secured credit cards are linked to the money you have on deposit, and you cannot charge any more than that amount. As you pay your bill in full each month, you can start rebuilding your credit and get on with your life.