How to Rebuild Your Credit & Finances After Bankruptcy

Introduction

Bankruptcy, now here's a scary word that's loaded with emotion. Generally, it's associated with images of personal ruin and financial havoc. When you've exhausted all possible options and have no more choices but to file for bankruptcy, it might seem like the world is crumbling all around you...

However, you need to know that no matter how desperate the situation may look to you at this moment, how bleek the future, you can take back the control and slowly rebuild your financial health. We propose to show you how in this presentation.

First Things First

Now that the dust has settled on your bankruptcy, you're willing to work towards regaining a grip on your life, but chances are you have asbolutely no idea where to start. As when it rains it pours, those money problems probably also led to personal issues, and your health, relationships and self-esteem were likely affected too. If it's very important to get your finances back on track, though, you should also look into fixing those private matters as it's the only way you'll truly be happy again. If apologies are to be made, get to it. If the stress put pressure on your heart, consult with a physician and start doing some light exercise.

All in all, to get back in the driver's seat, you first need to be mentally ready. So, make sure that you solve any underlying issue that's nagging at you.

Keep a Budget

OK, now that you have your mind set on the task at hand, you need to sit back and analyze your past behavior. Try and see how and why you went bankrupt. Learn from your mistakes so that you don't fall into the same trap twice.

If you find that the problem stemmed from your spending habits, keeping a budget might go a long way towards achieving your goals. Keeping a budget is all about knowing how much money is coming in and how much is going out. It will protect you against any surprises. So take out the calculator, a piece of paper and a pen. Have a seat, make your plan. And stick to it! Financial stability begins with building solid foundations.

Start Saving

If you’ve never done it before, it might be hard at first, but try and save some money. Keeping a budget as advised previously should greatly help in that it will show you where you can make your cuts and free up some dollars. Just know that it doesn't have to be in the thousands or even in the hundreds; you can start small. In fact, you should start if only to create a habit so that you find yourself putting money aside every month without even thinking about it.

Once you have learned to better manage your finances, you can really get serious and optimize your expenses in order to liberate more cash and build yourself an emergency fund. This will be your cushion in case something bad occurs.

Always Pay on Time

The number one rule to remember is that if you continue acting like you did before, history is bound to repeat itself. You need to avoid getting back into your old ways at all cost, letting bills pile up until you lose control once again and find yourself unable to cope.

XxxxxPaying your bills on time is not only crucial to keep bankruptcy at bay, it’s also about the single most powerful tool you have in your possession to improve your credit score. Indeed, this represents an important metric that accounts for a lot of points in the calculation of your score. So, when you’re planning your budget, always make sure that your money will go towards paying those bills first.

Use Credit to Build Credit

In the same vein, using a secured credit card can also help you on your way to a better CS. Unlike regular credit cards, with a secured one, you will have to pay the bank before you can use the money (much like a debit card.) So, you greatly limit your risk.

Use what? I know, the last thing you want, after suffering a financial disaster, is to get back into debt. However, we're not suggesting that you borrow money to go on a spending spree and put yourself in the red again… After you've built your credit score up (usually after 1 or 2 years), asking for a loan and repaying each instalment in time can do wonders for your score.

Conclusion

Let’s not downplay the negative impact that bankruptcy can have on all spheres of life, from your sense of self-worth to the breakdown of your marriage. But you can recover from this situation. Just take it one day at a time and really focus on rebuilding your credit and mental toughness. Just one day at a time, a small step building on a smaller one, and soon you’ll find yourself back where you want to be. The past does not equal the future. You can do it!

For more information about bankruptcy and how to avoid it in the first place, visit us at:

http://doylesalewski.ca/