After Bankruptcy: 6 Steps to Financial Recovery (Part 2)

January 24, 2014

Living by a budget and focusing on rebuilding your credit are two things you can do to slowly recover financially after bankruptcy.

Living by a budget and focusing on rebuilding your credit are two things you can do to slowly recover financially after bankruptcy.

Picking up from After Bankruptcy: 6 Steps to Financial Recovery (Part 1), in the following, we will highlight two additional steps that will be crucial for people to take after filing for bankruptcy. By being diligent to follow all six of the steps discussed in this three-part blog, debtors will be able to slowly recover financially and, in turn minimize their chances of needing to file for bankruptcy in the future.

In addition to identifying factors that led to a bankruptcy filing and setting some specific financial goals, as discussed in Part 1, it’s also important to do the following:

  • Tip 3: Live by a budget – Creating a monthly budget for yourself is one of the smartest things you can do after a bankruptcy case. This is because, with a budget, you will clearly define how much money you need to cover your essential monthly bills (like your living expenses and debt payments) and how much extra money (if any) you have to spend on other, nonessential items.

    When developing your budget, it’s crucial that you account for all of your necessary monthly expenses – including (but not limited to) your mortgage or rent payments, your car loans, your student loans, your credit card bills, your food bills, your gas bills, your utilities/cable/phone bills, etc. Failing to get a realistic total of what you need to spend each month on essential bills will defeat the purpose of having a budget and could lead to you the vicious cycle of debt that got you into financial trouble in the first place.

  • Tip 4: Start to reestablish your credit – Although it’s not generally a good idea to run out and sign up for new credit cards immediately after your bankruptcy case has been processed. Within the months following your case, you should consider getting one or two credit cards so that you can slowly start to rebuild your credit score.

    It’s important to point out that, when getting your first credit cards after bankruptcy, you will likely have to front money and/or deal with extremely high interest rates (due to the impacts the bankruptcy case has had on your credit). However, if you are able to obtain credit cards and are diligent about paying off the balance every month, then you will slowly be able to strengthen your credit score and be eligible for credit lines associated with lower interest rates.

Look for our third and final part of this blog for the last two tips that are essential for financial recovery after bankruptcy.

Colorado Bankruptcy Lawyers

If you are overwhelmed by seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C. For more than 35 years, Mr. Clarke and his diligent support staff have been successfully helping our clients resolve even the most complex bankruptcy cases for both individuals and businesses alike. Our experienced legal professionals are committed to providing each of our Clients with the personalized debt relief assistance they need, and we will work tirelessly to ensure that our Clients’ cases are resolved as favorably and efficiently as possible.

For a thorough assessment of your situation, along with expert advice regarding the best manner in which to move forward to unburden yourself from debt, call us at (866) 916-3950 or email us some details about your situation by clicking here.

Categories: After Bankruptcy, Blog, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Debt Relief, Finances, Financial Recovery, Financial Tips