Filing for bankruptcy brings mixed emotions for most people. On the one hand, you probably feel relieved that your financial stresses have been relieved or lessened and that your monthly budget is more manageable. On the other hand, you may be feeling a little helpless about the status of your financial future and your ability to move on because of the hard hit your credit has taken. The good news is, there is life after bankruptcy! With a little time and a little more effort, you’ll be back on top again soon.
Check Your Attitude
The best thing you can do for yourself after a bankruptcy is to jump right back in with an eye toward the future. You’ve just made a huge change in your life and given yourself a fresh start. Seize this opportunity to change your habits, your attitudes toward money, and the financial landscape of your life for yourself and for your whole family.
You may have a low credit score, but you also have unlimited potential to make things better, which you probably didn’t have just a few short weeks ago. If you can prove yourself to be a positive person who is willing to work hard to get things right this time, this will reflect when meeting with potential creditors, which will help you to establish new credit.
Control Your Finances
As soon as your bankruptcy is discharged, you will begin receiving items in the mail with offers for new credit cards, car loans, and retail accounts. You’re probably tempted to take immediate advantage of these offers for the sake of rebuilding credit. However, this may not be the best idea. You may have some bad habits and issues that led you up to bankruptcy in the first place that you need to work through before you begin opening new accounts.
Reign in your finances and give yourself a solid foundation to rebuild your credit on. Simplify your life and strip your finances down to only the necessities. Rather than being restricting, this will give you a feeling of freedom as you rid yourself of financial stress. Learn to live within your means by adhering to a cash-only lifestyle. Using only cash or your debit card to support yourself and steering away from credit for now will give you an idea of what kind of lifestyle you’re set up to afford.
Rebuild Credit
Once your foundation is set and your attitude is ready to go, you are poised to begin to build new credit. Start small, with just one credit card. Pay your bill on time every month and pay the full balance every time. Don’t max out your limit and use the card to make one or two purchases each month which you immediately pay off. Essentially you’ll still be living a cash only life, but building credit at the same time. Your interest rates will likely be high at first, but they will begin to come down if you manage your early accounts well and you can work up from there.