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Important steps to take once emerging from bankruptcy

On Behalf of | Nov 2, 2021 | Personal Bankruptcy | 0 comments

The habits that steered you toward bankruptcy are now in check. You filed for personal bankruptcy, completed the process and have emerged with a fresh view of all things financial.

In the months going through bankruptcy, you confronted your overspending, questionable financial decisions and lack of personal savings. Now, it is time to take steps in the opposite direction; one that will lead you toward financial freedom and independence. You gain a rewarding rebirth post-bankruptcy.

Get a secured credit card and monitor credit report

Now that you have emerged from bankruptcy, it is a good idea to consider and adopt some new financial habits. They may include:

  • Obtaining a secured credit card: Such a credit card may help rebuild credit. Secured credit cards are backed by cash deposited in your bank account. That amount – say $200 – represents the credit limit. After using this card for a year or two, you have shown creditors that you gained financial responsibility. Then you may transition to an unsecured credit card.
  • Limiting your credit-card spending: Keep that one credit card. However, you should use it sparingly. When it comes to spending, rely mostly on cash.
  • Tracking your expenses: Doing so helps determine where your money goes and may lead you to create a budget. This way, you can eliminate certain expenses as well as determine spending priorities.
  • Paying your bills on time: This important habit will fend off creditors who now may no longer consider you as a credit risk.
  • Saving money: By subscribing to the above habits, you may rebuild your savings and create an emergency fund consisting of six months of personal expenses.
  • Checking your credit report on a regular basis: Your goal is to improve your credit rating and you may monitor your progress by checking the credit report. Also, be diligent and make sure that no errors surface.

These steps simply represent a new beginning for you. You can succeed in your financial recovery.

A new beginning

When it comes to post-bankruptcy, it is a good idea to reflect on your previous financial behavior but do not linger too long. This is a new beginning for you, and you have taken the first steps toward erasing the past and thinking beyond recovery.