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We practice CONSUMER BANKRUPTCY
law exclusively. 407-982-3763

We practice CONSUMER BANKRUPTCY law exclusively. 

One of the top Bankruptcy Filers

in the Orlando Area

One of the top Bankruptcy Filers

in the Orlando Area

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  4.  » Four tips for getting your finances back on track after bankruptcy

Bankruptcy isn’t a declaration of failure. And it’s certainly not a permanent mark against your financial record. After bankruptcy, when you’re enjoying freedom from the debts that made your life hell, you can start to build a better financial future.

Here are some tips for getting back on track and preventing setbacks down the road.

1. Get a credit card – but use it wisely

Just because you’ve filed bankruptcy doesn’t mean lenders will blacklist you. In fact, from the perspective of most banks, you’re now in a much better position than you were before bankruptcy. You’re no longer strapped with debt, and you have a far improved income-to-credit ratio.

The surest way to get back in lenders’ good graces is to gradually rebuild your credit. You might get flooded with offers from questionable credit card companies after bankruptcy, but these offers usually come with steep interest rates and annual fees. Instead, consider getting a secured credit card from a reputable bank. With a secured card, you will have to put down some money upfront. You can then borrow a certain percentage against that deposit – a safeguard for making sure your spending doesn’t spiral out of control.

Another option is a retail or gas card. Typically, these cards are easy to qualify for, and they don’t have annual fees. With any credit card, however, make sure you don’t rack up too high a balance, and pay it off in full every month to avoid exorbitant interest charges.

2. Make a budget and stick to it

Financial planning isn’t just for the rich. People of all economic backgrounds can benefit from mapping out a realistic monthly budget. By keeping track of all your current and upcoming expenses – including recurring charges that often go overlooked – you can develop a clearer picture of your financial priorities. You might even discover opportunities for trimming expenses.

3. Establish a savings account

Bankruptcy often comes about because of an unexpected life event – a major medical need, divorce or job loss, for example. It can also happen when a “perfect storm” of smaller unforeseen expenses add up to financial catastrophe. In desperation, you may have fallen for financial traps such as payday loans, predatory lending schemes and out-of-control credit card debt, leading to skyrocketing interest charges that only compounded the problem.

The key to avoiding these costly surprises is simple: Establish a savings account and contribute to it faithfully. Even setting aside a few dollars out of every paycheck can go a long way toward building up a substantial cushion of savings. Make sure to plan for these savings in your budget, however, and don’t touch the money unless absolutely necessary.

4. Steer clear of credit repair companies

Many companies try to take advantage of bankruptcy filers. Some aggressively market “credit repair services” that turn out to be nothing more than what you could easily do on your own. There are no secret loopholes for erasing bankruptcy off your record or magically boosting your credit score overnight. However, by reviewing your credit reports on a regular basis, you can keep an eye out for any errors, inaccuracies or outdated information. Credit reporting bureaus are legally required to fix these problems.

The takeaway

As you can see, bankruptcy doesn’t spell the end of your financial opportunities. On the contrary, there are many ways to build – and keep – healthy financial habits after becoming debt-free through bankruptcy.