Bankruptcy is a great tool for wiping the debt slate clean and obtaining a fresh start for a financially sound future. However, many people fear the process assuming that getting back on their feet will be difficult. This misconception leads too many people astray from the benefits bankruptcy has to offer. While having your debts discharged is not the end of the road, taking a few simple steps after bankruptcy can ensure you get on the right path.
Finding Stable Ground
Now that your debts have been discharged you are in the unique position to take control of your finances. To start, take a look at your credit report. You should find that any negative or delinquent accounts have been removed or changed to a satisfactory standing. If this is not the case, you need to contact your creditor to have them update your account information with the credit bureau. It can take a month or two before your credit report accurately reflects your new account statuses. In the meantime, begin planning your next step into responsible borrowing.
Although filing for bankruptcy doesn't damage your credit, chances are your credit does need some repair after their previous delinquent status. The fastest way to rebuild credit is to obtain new credit and establish a responsible borrowing history. Obtaining new credit after bankruptcy can be somewhat of a challenge, but a little patience can put you in touch with the right line of credit. Avoid large credit limit or secured lines of credit. At first, obtain a lower limit unsecured card and maintain a manageable balance on the account. Although paying off the card is always a good idea, you do need to maintain some amount of debt to boost your credit. Keep your overall debt balance less than 40 percent of the total available line of credit to give your credit the biggest boost. Making timely payments for six to twelve months and staying out of poor spending habits will put you on the fast track to good credit.
Now is also the time to put what you learned in your credit counseling course to good use. Remember the importance of changing your prior spending habits and set your mind to becoming a smart money manager. This means developing and following a monthly budget, prioritizing increasing your savings account and using new credit wisely. Money management is crucial for your future financial success and takes effort and commitment. If you see yourself slipping into old habits, make sure you have someone to hold you accountable for your new goals.
The Lee Law Firm is a Dallas, Texas bankruptcy firm that aims to provide local residents with high quality legal representation at affordable rates. Their attorneys are professional and compassionate, giving clients the personalized attention they deserve. When filing bankruptcy, the Lee Law Firm is the right choice to help in the face of financial hardship.
