Filing for bankruptcy can relieve an enormous amount of stress from your life. Once you realize you have your debt under control, rid yourself of harassing phone calls from creditors, and feel positive again about your financial future, so much anxiety is lifted from your shoulders!
The last thing you want to do is make poor decisions moving forward that will lead you into a similar situation again. That’s why here, at Half Price Lawyers, we’ve created a helpful page on how to bounce back after filing for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy—as well as how to prevent yourself from getting into the same situation EVER AGAIN.
Build (and stick to!) a Financial Plan
Whether you call it a budget or opt for a fancier name like “financial strategy,” having a clear idea of what your bills add up to, how much you want to save monthly, and what your long-term financial goals are is VITAL to your overall financial health. For a detailed, printable spreadsheet of monthly spending, click here!
Basic economics tells us: the money coming in must be equal to or greater than the money going out in order to maintain the most basic level of financial peace; so be sure to survey your spending and reflect upon whether or not you can make any cuts or need an additional source of income to keep up with your desired lifestyle.
As well, life loves throwing curve balls in our direction, so it’s in your best interest to have a savings account that you only touch for emergencies. The above spreadsheet accounts for savings; use this guideline religiously.
Rebuild Your Credit After Bankruptcy
Another important thing to remember: filing for bankruptcy does NOT ruin your credit forever. In fact, you can begin to improve upon your credit immediately. Knowing how to rebuild your credit will help your credit score improve, allowing you access to ever greater financial freedoms. Some of our clients have re-built their credit to over 720, in just 12-24 months after bankruptcy! Talk to one of our lawyers to discuss a credit re-building plan, post-bankruptcy.
Credit Cards After Bankruptcy
One of the best things you can do after filing for bankruptcy in Nevada is to take out three lines of credit via credit cards. BUT you must make timely payments on these credit cards (no late payments, no fees!) In fact, to avoid additional debt down the road, you consider only charging what you can afford to pay off IN FULL at the end of every month. How’s that for a concept? What if you only spend the money you have in the bank to spend?
When searching for credit cards, search for cards that offer points and have no annual fees. You may be somewhat limited in your options, but there ARE cards that are backed by cash deposits, or secured credit cards; after you make regular payments on one of those cards for a period of time, you may be able to switch over to an unsecured or regular credit card. Again, speak to one of our lawyers so we can better advise you and your case specifically.
Check Your Credit Score Regularly
It’s good to know where you stand, on a regular basis. There are many free options available to check your credit scores. Take advantage of these options and keep track of your score; it may help rebuild your confidence as you watch your score rising.
Pay All Your Bills on Time
Not only are late fees expensive and annoying, but your credit is dinged when you fail to pay your home, auto, and any other bills on time, every time. Set up a chart with due dates to stay on top of your bills monthly. Or, link bills to a credit card so they are paid automatically each month, and you don’t need to remember to pay them (though you DO need to remember to pay that credit card bill monthly!)
FAQ About Bankruptcy – Can I get a loan after filing for bankruptcy?
This can be very difficult for the first few years after filing for bankruptcy. Although it is possible to rebuild your credit and increase your credit score by acquiring secured credit cards, bigger purchases such as a car or a house aren’t likely until a couple years after filing.
To note: there are some companies that offer crazy-high interest rates on large loans (such as auto or home) to people who have filed for bankruptcy. Taking a loan out with one of these companies is NOT a good option, at all, and we strongly advise against it.
Remember: your goal is to build a healthy, stress-free, financial life after bankruptcy. Taking out a loan with a ridiculous interest rate is NOT helping you reach that goal.
For additional insights or a free consultation, call Half Price Lawyers at 702-400-0000