Rebuilding Your Finances After Filing For Bankruptcy
If you’ve filed for bankruptcy, you might feel like you’ve hit rock bottom. Although bankruptcy wipes out your debts, it stays on your credit report for 7-10 years and causes a significant drop in your credit score, which can make it difficult to qualify for a mortgage or other credit.
How do you make a smooth recovery from bankruptcy? It can be challenging, but learning to manage your cash flow, establishing good credit, and rebuilding your financial profile doesn’t have to be overwhelming. Check out these tips from a top rated Gilbert bankruptcy law office to help rebuild your finances and get a fresh start.
Save The Paperwork From Your Bankruptcy Filing
It may not seem important, but keeping all of the paperwork from your bankruptcy case can be helpful when you apply for a mortgage, loan, or other financial account in the future. Saving the paperwork can also provide helpful proof of discharge if you are contacted by a debt collector.
Start Saving & Create a Budget
The last thing you want is to go through another Gilbert Chapter 7 bankruptcy again. Establish good financial habits, including starting a savings account for emergencies. Create a budget to help manage your income and guide your spending. These steps are crucial to keep spending in check and reduce the chances of accumulating overwhelming debt again. Check out online resources for learning more about making a budget, or consult with a financial advisor who can help you get started.
Re-Establish Good Credit
Building up your credit score is an important part of financial recovery after filing bankruptcy with a Gilbert bankruptcy lawyer. There are several ways you can work on this, including:
- Pay all of your bills on time
- Open a secured credit card, which requires an upfront deposit and is one of the best ways to rebuild credit
- Contact your utility companies to ask them to report your bill payments toward your credit score
- Consider a credit builder loan
- Making your Chapter 13 bankruptcy payments on time, if applicable
Boosting your credit score will take time, but with patience, hard work, and good decisions, you’ll see your work pay off.
Consistently Monitor Your Credit Reports
You may feel intimidated or anxious about looking at your credit report after filing for Gilbert Chapter 7 bankruptcy, but making this a regular habit is important. Carefully monitoring your credit report will help you verify that all of the information on your profile is accurate. Inaccurate information can make your credit score lower than it should be. If you find a mistake on your credit report, contact the credit bureaus and the business that reported the information. Keep everything in writing and maintain records of the situation; the credit bureaus will have 30 days to investigate and correct the errors. You can download free copies of your report from each bureau once a year, which you can ideally space out throughout the year so you are able to view one report every few months.
Keep Up With Your Job & Home
An essential part of post-bankruptcy life is maintaining your home and your job. You want to show lenders that you are able to pay off debts and maintain a steady, reliable income. Additionally, many lenders will consider your employment history as part of their loan application process. Having consistent income can boost your reliability for lenders and make it easier for you to get a loan when you are ready.
Develop an Emergency Fund
If you have an unexpected financial need, having some cash saved can help you avoid poor financial decisions and disastrous debt. Start this process as soon as possible and make regular deposits, even if they are small. One easy way to begin building an emergency fund is by asking your employer to deposit a certain amount into your savings account whenever they write paychecks.
Consider Your Financial Future
What goals do you have for your future? Do you want to own a home or a specific type of vehicle? Maybe you want to go back to school or start a family. After filing for Gilbert Chapter 13 bankruptcy, putting some focus on your financial future and life goals can keep you motivated to stick with a budget, save money, and avoid unnecessary debts. Managing your cash flow and making careful financial decisions is the best way to secure your financial future.
Although your credit score will take a significant hit after your file for bankruptcy, it’s possible to recover, get back on your feet, and even have a better credit score than you did before filing. Incorporating responsible saving and budgeting, while working to rebuild your credit score, will help you make a better future for yourself.
Gilbert’s Best Bankruptcy Lawyer Is Ready To Help
If you’re feeling overwhelmed with your financial situation and wondering whether filing for bankruptcy is right for you, schedule your free, no-obligation consultation with the friendly and experienced legal team at Gilbert Bankruptcy Lawyers. We will carefully examine your situation and provide legal advice you can trust. Call our office to get started with your future!