Filing for bankruptcy is serious, but it is actually can be a reason for optimism. With creditors held at bay and a financial plan outlined, you are prepared to work your way back. Most people take some extra precautions with money just to be sure the same thing doesn’t happen again. However, diligent efforts can bring rewards in as little time as 1 year after a bankruptcy proceeding.
If you proceed cautiously with your money, you can start seeing improvement in your credit ratings in that timeframe. Over the years thereafter, your financial status rebuilds gradually. Although the filing remains on your credit report for 10 years, most people find they are able to get credit long before then.
Financially Rebuilding Your Life After Bankruptcy
Rebuilding your credit standing can take time, but your vigilance can make a big impact. Do not forget that you will be debt free. Here are some suggestions to minimize your financial recovery time, get back on track, and ensure you never need to file for bankruptcy again.
- Cut back on unnecessary purchases – This may mean only buying the essentials and looking for better deals.
- Start rebuilding your credit – While you may not be able to get a credit card or loan in the months following a bankruptcy, when you are able to, the interest rates will likely be high; however, showing creditors that you can pay back these loans will be key to rebuilding your credit score.
- Pay your loans on time – if you have a car loan that you will be paying through and after the bankruptcy, or have student loans, pay them religiously. These payments will be reflected on your credit report and help your credit score improve.
- Pay all of your bills on time – This is another factor will that slowly help to rebuild your credit score. If you can prove that you can pay your bills on time, the interest rates on your credit cards will be reduced.
- Start rebuilding your savings account – Because it will take some time before creditors will allow you to open a credit card and secure a loan, it will be important that you have a financial safety net, also known as a savings account. Showing your creditors that you have excess money to put into savings shows you have the money to pay on a credit card.
For this and other informed, intelligent and candid bankruptcy advice, call (718) 544-0500. The initial consultation is free.