Following a Chapter 7 bankruptcy, many people feel relieved that much, if not all of their debt burden has been erased. However, the process is not over, as it’s important to begin rebuilding your credit and planning ahead to avoid another bankruptcy filing.
Reflect on Past Mistakes
This may sound a bit overwhelming and stressful, but it’s important to remember that you really aren’t alone. More than a million Americans file for bankruptcy each year, and some estimates put the current total of outstanding credit card debt at $850 billion. However, since it can be very easy for Americans to find themselves in debt trouble, it’s vital that you look at the behavior that got you to the point of bankruptcy. Most people find that they have engaged in less-than-ideal spending habits or haven’t saved as aggressively as they should. Of course, others will find that they struggled with unexpected and unavoidable medical bills or similar expenses.
In short, don’t beat yourself up for your past behavior, but be aware of it so you can prevent debt issues moving forward.
Plan for the Future
Although it’s important to be aware of harmful behavior, awareness does no good if you don’t work to prevent it. There’s never a bad time to implement a budget, but it’s especially valuable after you’ve filed for Chapter 7.
- Build an emergency fund to bail you out if times get tough
- Learn how to prioritize your expenses
- Work on living below your means, to help build savings
- Repay bills on time to help restore credit
Choose a Secured Credit Card
Following Chapter 7 bankruptcy, you’ll want to start rebuilding your credit. Even if you don’t plan on using a traditional credit card in the future (not a bad idea), you may still want to eventually get a home, auto, or business loan.
Secured credit cards are a great way to help you rebuild your credit safely and responsibly. With these cards, you deposit money into a specific bank account initially. That amount of money becomes your credit card limit, allowing you to charge a small amount and repay it. However, make sure you choose a secured card which reports your payment history to the credit bureaus – otherwise, this will not help you repair your credit.
Considering bankruptcy? Call our Brevard County bankruptcy attorneys at (321) 320-6088.