The realization that you can’t pay all your bills each month can quickly put you into survival mode, which means you only pay what’s necessary to live. Late fees and negative marks on your credit report are likely going to affect you.
For some people, the hope of getting these debts taken care of gets a little farther away with each missed payment. One option that will help them is to file for bankruptcy. For some, the fear of how they’ll rebuild their credit makes them think twice about bankruptcy. The fact is that it’s possible to rebuild your credit even stronger than it was before.
1. Set a budget and monitor it
As part of the bankruptcy process, you have to take credit counseling and debtor education. These will teach you how to handle money responsibly. Setting your budget during this process ensures you have a plan for your money. As you go through the process and your finances change, you can adjust the budget.
2. Obtain secured lines of credit
You can’t obtain new lines of credit while the bankruptcy is open. Once it’s discharged, you can find some that will help you reestablish your creditworthiness. This might be limited only to secured cards at first.
3. Be patient
It will take time to rebuild your credit history after your bankruptcy. Companies will be leery of extending credit too soon after your bankruptcy, but it should get easier as time passes.
Bankruptcy is a legal way for you to take control of your finances. Taking this step once you realize that you need help is crucial. Remember, the challenges that come with bankruptcy are temporary, so you’ll soon be on your way to a better financial future.