At some point in time you got yourself into a bad financial situation where your only way to get out was by filing for bankruptcy. You may be feeling bad about your financial situation for letting it get to this point, but this is your chance to turn things around. In the process, you most likely got some of your debts discharged. If you filed for bankruptcy, it was most likely the best option for you, in order to start rebuilding your future. Even though your credit report may say “Chapter 7 bankruptcy” or “Chapter 13 bankruptcy”, you still have the chance to avoid any future debt and regain your credit.
Just because you had to file for a Chapter 7 or 13 bankruptcy, does not mean that your future is forever doomed. Often people may start to lose track of their financial debt when there are large medical bills, or perhaps you started relying on your credit card far too much. For whatever reason that your debt had accumulated, you can now begin to start making better decisions for the future. You are definitely going to want to start budgeting your expenses and start saving more. If you had filed for bankruptcy, you either were discharged for most of the debt, or you still have debt you are going to need to pay off.
Starting a way to budget your money is a must if you want to avoid debt in the future. It’s important to remind yourself that you cannot spend money that you do not have. The most difficult task when creating a budget is making sure that you stick with it! It is especially important to make sure you stick with it if you filed for a Chapter 13 bankruptcy. This means that you will be paying off some of your previous debts . This is also know as reorganization. For the next three to five years the court will determine how much you can live on. The rest of the money will be split among creditors. You will just be accumulating the basic necessities each month.
Budgeting is a great way to keep track of how much money you are making compared to the money that you are spending. You should track everything that you purchase and evaluate whether the expense was a necessity or not. Try to figure out ways that you can cut your expenses. Luckily in this time period, we have technology to make the task easier. There are plenty of apps and websites that assist with budgeting and planning.
Saving money is an obvious must. Depending on the income that you are receiving compared to how much you are spending, this may seem like a difficult task. It is important to at least try to save a little bit from your paycheck every week. Accumulating your own money is also a good way to avoid the use of credit cards. Credit cards are often what gets people in these bad financial situations to begin with. If there is a certain item that you want, but you do not have the cash for it, keep on saving. Often people resort to using their credit card right away, but that usually leads to bills that they cannot pay.
If you want to rebuild credit, you may want to consider obtaining a secured credit card. You will deposit money into an account, and the only money you will be able to spend is the amount that is in that account. This will help when you need to pay bills on time. The use of this card will show that you can be trusted with money again.
It is important to educate yourself on money and credit to make sure that you do not end up in a situation that leads you to bankruptcy again. Take your time out to properly plan, go over your bills, and work on your spending habits. This will make all the difference when trying to rebuild credit. Despite the financial situation that you were in, now is your time to make it better. Keep a positive attitude, and follow these tips, and you will be in a much better position than you once were.
Sources: Legal Zoom