While declaring bankruptcy is definitely a life-changing event, it doesn’t need to ruin your life and it definitely doesn’t need to ruin your future. Actually, bankruptcy laws were put into place so that people could have a chance at a fresh start. Sometimes unexpected and unfortunate circumstances such as divorce, job loss, and medical bills can drive people deep into debt. Eventually, bankruptcy may be the best option. If you have been disheartened by a recent bankruptcy, it is important to recognize that there is hope. By employing good financial strategies in the future, you can recover from bankruptcy and continue living a fulfilling, happy life.
Emotional Recovery
Once you have declared bankruptcy, the first step should be emotional recovery. For many people, declaring bankruptcy is a source of shame and disappointment. When you continue to dwell on these feelings, you can become demotivated, demoralized, and even depressed. Instead, be realistic about your situation. Recognize that there were several factors that contributed to your bankruptcy that were both in and out of your control. Also recognize that your financial status does not define who you are or who you can be in the future. Many people who have declared bankruptcy go on to become financially successful and you can too.
Make a Plan
By identifying the problem areas in your financial past, you can make a plan for your future. Although the bankruptcy will affect your credit score, you can start to rebuild your credit over the next few years. If you lost your home, you can certainly become a homeowner in the future when you carefully employ good financial management techniques.
If you feel like you need assistance, contact a financial planner. A small investment in financial counseling can yield great results if you are dedicated and continue to live by the principles that you learn. Take time to create a budget. Be realistic in determining the amount of money that you need, but also look for areas where you overspend.
Set aside money for savings. By building an emergency fund, you can be prepared for any unexpected expense or problem that may come your way in the future.
Rebuild Credit
After bankruptcy, it is important to start rebuilding your credit score as soon as you can. You may consider obtaining a secured credit card with a low limit. Make sure that you pay off your credit card in full every month. This is a great way to establish better credit while also building good financial habits. Although the bankruptcy may remain on your credit report for up to ten years, you can actually achieve a good credit score within a year or less when you make financially responsible decisions.
For more tips on how to build credit after bankruptcy, call California Bankruptcy Relief at 888-748-0025.
