Bankruptcy is considered as one of the life-changing events a person can experience in their entire life. It can have a devastating effect not just on your credit score, but the rest of your financial resources. While reasons for filing legal insolvency may vary from one person to the other, what’s important here is the fact that bankruptcy may mean your inability to pay back your debts in many different ways. If you think your financial health is impaired, here are ten effective ways to deal with bankruptcy.
1. Plan your budget – Planning your budget can be a great way to get back on your feet after bankruptcy. While the aftermath of being insolvent can be traumatic at times, you can still save yourself from drowning financially by creating your budget plan.
Remember that making a budget depends upon your will to recover from your financial dilemma. If you have the motivation to change everything how it works, begin it by tracking your expenses for a few months to come up with the idea of how much you’re usually spending.
By knowing where your money is going, you can be able to set limitations on your spending practices and later on create an accurate budget that suits your monthly earnings.
2. Pay bills on time – Recovering from bankruptcy may be complicated. But if you’ll start changing the way you deal with your financial duties, you can do it by paying your bills on time.
Bills make up a significant amount of your monthly budget. That’s why it’s best to plan out your payment schedules and pay your bills on time even if it’s small ones.
3. Get help from family and friends – Generally, getting help from family and friends for some financial difficulties isn’t a good option except when you’re going through a bankruptcy in your economic life.
One way of making the most out of your family and friends’ help is to calculate how much money you need to recover and ask them to make up the difference. However, you should make sure that before approaching them that you have determined how you’ll be going to pay them once your financial burden has lapsed.
4. Monitor your credit report – It’s no question that credit reports are being considered when filing bankruptcy.
In fact, the filing of such financial option can be made to clean the damage brought about by unpaid debts; thus, you need to ensure that it is reflected on your credit reports. If you want to retake control over your finances, monitoring your report regularly can also be beneficial.
5. Secure a credit card – If you think about establishing good credit, getting a credit card can be a perfect idea.
In choosing a credit card, you can select whether you’ll go with a secured or unsecured credit card. While these two may vary regarding coverage and processes, both of them can be the best way to reestablish your credit rating.
However, dealing with credit cards isn’t easy as you should only use it for emergencies and specific purposes – and if you want to be back on track, use your credit card to establish a good record of borrowing and repaying your debts.
6. Refrain from making a loan or applying for mortgages, if possible – To put a damaged credit together again, it’s best to refrain from making another loan or buying expensive things such as a car.
Take note that you can only bounce back from bankruptcy if you know how to rebuild a positive post-bankruptcy credit history. In other words, you need to re-establish your credit during that two-year credit-building practice – and you can only do it by waiting for a few years until you can show that you can be trusted when applying for loans and mortgages.
7. Develop good credit relationships – Like other long-term relationships, nurturing your credit relationship can help you build your credit.
Remember that longstanding credit records with one or two cards can build better relationships and in turn, it has something helpful to contribute to your credit rating.
8. Beware of scams – Bear in mind that re-establishing your credit is difficult, but it’s something you should fix by yourself.
It’s essential to be cautious about anyone who promises to repair your credit when you’ve filed bankruptcy. If someone asks money from you, be careful. While fixing your credit doesn’t happen overnight, you have nothing to lose if you’ll avoid many scammers around you.
9. Try the magic of human touch – It’s understandable that lenders become hesitant doing business with you after bankruptcy.
If you’re having trouble talking to lenders to take another chance on you, don’t forget the magic of human touch. You can write a letter explaining why you’ve ended up with bankruptcy. Make your lenders understand that this is just a one-time situation and you can recover in no time.
10. Seek professional advice – When all things about your financial health don’t turn out well after a bankruptcy, seeking professional help can be helpful.
Enlisting the help of a professional can factor into how you’re dealing with bankruptcy. By undertaking counseling, you’ll be able to learn some debt management plan which can help you to budget accurately.
However, should you need the assistance of an attorney to handle your bankruptcy case, you can also ask for professional advice from a licensed lawyer specializing inbankruptcycases similar to yours. By doing so, you’ll be able to know and understand how bankruptcy should be dealt with legally.
Trying and applying out some of these useful ways can go a long way in helping you deal with bankruptcy. You may try one or two depending on your circumstances. Just remember that the process wouldn’t be easy, and there can be no more straightforward way to fix your credit at once. In the end, you can try a new financial approach on how to handle your finances – and as a result, you’ll be able to make your money work for you in the long run.
About Author:
Gail Wilson has more than 12 years of experience under her belt when it comes to business, which she is currently sharing with her clients and peers as part of the law industry. She writes pieces on various law topics that she hopes could help the common reader with their concerns. A family oriented, Gail loves spending time with her husband and two sons during her free time.
Gail Wilson has more than 12 years of experience under her belt when it comes to business, which she is currently sharing with her clients and peers as part of the law industry. She writes pieces on various law topics that she hopes could help the common reader with their concerns. A family oriented, Gail loves spending time with her husband and two sons during her free time.
