Filing for Bankruptcy can be really hard and you might feel that you have hit the rock bottom. It does leave a stain on your financial life for the next few years. However, bankruptcy is not the end of the world. It is a misconception that you cannot recover after declaring bankruptcy. This mindset also hampers any chance of getting back on track. Here are few tips on getting back on track after a bankruptcy.

Start Using Cash

The way you used Credit cards and personal loans led to the trouble that you are in right now. Since, you will not be able to get a new credit card for a while now, start loving and using cash. Paying by cash eliminates the possibility of going into any debt. Additionally, you will learn to buy the things that you need and you will also learn to save money.

Timely payments of bills

Since credit card bills will not burden you anymore, there are other bills like electricity bill, water bill, auto loan, rent, etc. that will be required to pay. You should make sure that you pay all the bills, large or small, on time. If you are being charged late fee payments or having your cheques bounced, it will reflect in your Credit Report, thus making it more difficult to get new credit. If you pay all the bills in a timely manner, it will help create a better credit history and boost up your credit score.

Budget

Creating a budget is a big task and maintaining it is even a bigger task. You need to track your expenditure for a few months before you can actually create a realistic budget that fits within your income. A realistic budget also helps in setting boundaries on the way you spend. When you spend keeping the budget in the mind, you are becoming a person who manages money smartly.

Credit Reports

There are various ways through which you can get your credit report for free. Visit Indialends.com for a free credit report. After filing for bankruptcy, you have a clean slate financially. Make sure it is reflected correctly in your credit report. Monitor your credit report regularly to eliminate chances of any error. This is an important step for getting back on track after the bankruptcy. You will also realize how will the lenders view you when you apply for credit in the future.

Secured Line of Credit

A secured line of credit is when you have required a collateral asset for a line of credit. Banks and Non-banking financial companies offer very attractive interest rates for a secured line of credit. This is because the risk is reduced when you put collateral. You can withdraw from the available credit limit as and when required with the flexibility of repaying at your own schedule. Interest is not charged on the whole line of credit but only the amount that you borrow from the available credit limit. You can repay the amount borrowed and then borrow it again if you require. Repaying the interest or the borrowed money regularly helps in building a better credit report.

Forget expensive stuff for a while

Until and unless it is absolutely necessary, avoid buying a car for the next few years after you filed for bankruptcy. You should avoid spending on anything expensive for that matter, like jewelry, a flagship mobile phone, property, large appliances, etc. You need to spend the next few years rebuilding your credit report before you can apply and get an auto loan or any other loan with favorable terms and conditions. Try to save money and stick to your monthly budget diligently. You have to let go off some luxuries in life, but this will help in the future.

Beware of Scams

There are many companies in the market running scams wherein they promise that they can fix your credit report quickly after the bankruptcy. In reality, there is no short cut. It’s hard work to recover from bankruptcy. It requires discipline and willingness to have a better credit report. The best part is, you can do it yourself and for free. Credit cannot be repaired over a short period of time, though many scammers will promise to do it for you. For these false claims, they charge a huge fee.

Human Touch

Humanity still exists in the cruel world we live in. If you cannot get a lender to give you any credit. Go and meet them personally and explain your situation. If you can explain to them that this was genuinely a one-time thing and will not be repeated in future, there is a possibility of the credit officer giving you the benefit of doubt and thus approving you for the credit.

In conclusion, don’t lose all the hope because you had to file for bankruptcy. It is possible to get back into the game within a few years by following the points mentioned in the article. It will take lots of work and sacrifices, but it is possible that within a few years you may get new credit with favorable terms and conditions. Even the rate of interest might be reasonable. But you have to make sure that you do not repeat the same mistakes that you did earlier. Use the new credit sensibly and responsibly.

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