Rebuilding your emotions, finance and credit rating after bankruptcy may seem like an overwhelming task. However, if you filed for chapter 7 or 13 bankruptcy protection, then you should know that there is life after bankruptcy. You don’t have to live a life of credit exile where you are treated like a financial outsider and banished for many years.
On the contrary, your life after bankruptcy can be very rewarding, but only if you strategize well and commit yourself to not wasting your second chance which bankruptcy can offer. How well you rebound from bankruptcy filing depends on the steps you take to safeguard yourself from any future financial calamities. Here are four steps which can speed up your recovery process and help you get credit after bankruptcy.
Let the guilt and shame go
If you have gone through bankruptcy or expecting it, know that you are not alone. Personal bankruptcy rose by 9% to 1.530 million filings in U.S. A survey conducted by Findlaw.com in May 2011 showed that one in eight adults in the U.S, 13% of the population, admits to have considered bankruptcy. The above statistics shows that many Americans are battling the effects of the great recession.
People who file for bankruptcy protection are often affected by guilt and shame. But this feeling of guilt and shame will never make your situation better so that you can get another credit after bankruptcy. In fact, it prevents you from moving forward in the right direction.
Reflect and regroup
How can you get to a healthier place, financially and emotionally, if you cannot let go of your disappointing past? After the dust has settled, do some soul searching by asking yourself some key questions, such as “how did I get there? What could I have done different? What have I learned from all this?” your answers will assist you in creating a better financial life after bankruptcy and get that credit you want.
Create a reachable budget and pay your bills on time
After bankruptcy, you must be careful with your finances. Stick to your budget even if you have never done it before. Your budget acts like your spending plan, helping you in managing your cash flow and thus preventing you from having unnecessary debt. Include a line of saving in your budget so that you can pay yourself before others.
The next thing is to pay all your bills in a timely manner. Set up automatic bill payment systems and remember to pay your rent on time as it is being tracked by credit bureau Experian thus affecting your credit score.
Pick a credit card which will assist you to rebuild your credit
Go for a secured credit card as it will go a long way in helping you to improve your credit rating after your bankruptcy. You can rebuild your credit gradually by charging a small amount of money each month and then repaying it as agreed when you deposit a given amount of money in your bank account which acts like your credit limit.
There is a false assertion that it is next to impossible to get a credit card after bankruptcy for at least seven years. It is untrue because most bankruptcy filers get a lot of credit card offers from banks immediately after their bankruptcy is discharged. In fact, about 96% of consumers are offered new credit after they declare bankruptcy within a year.