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What Comes after Bankruptcy?
Bankruptcy may seem like the end of the world, but we can assure you that life will go on after the filing of your petition and receipt of your discharge. Having said that, there are some steps you should take immediately following the court proceedings to get back on track. Let’s take a look:
• Collect and retain all paperwork – After filing for bankruptcy, your lawyer will give you a copy of your bankruptcy petition. This 40-50-page document details your finances, including the assets and debts in your case. You should have also been assigned a case number. This is important because, when creditors call you, you can give them the case number so they know you’re doing something about the debts. Once they have the case number, they should no longer contact you, as your case is now placed in what’s called automatic stay. In automatic stay, creditors are not allowed to contact you or take any action because the debt is now a matter of the court. The bankruptcy court will also give you other documents and paperwork such as a notice of bankruptcy filing and a discharge order. It’s important to keep all these documents for future purposes such as when applying for loans, as the lender may want to take a look at them.
• Check your credit – This goes for everyone, regardless of financial status. Check your credit report! For those who have filed for bankruptcy and the case has been finalized and closed, you should wait a bit to check your credit. This gives creditors and lenders time to settle their accounts and cease communication with credit bureaus. As a bankruptcy can legally remain on your credit report for up to 10 years, you want to regularly check your credit score and report to see how a bankruptcy filing will affect you. Be sure to confirm that you have no outstanding debts after the bankruptcy so that credit bureaus don’t take action to collect on debt that shouldn’t be there anymore. You can also look at applying for new credit so you can build your credit score back up to healthy levels. Residents of Massachusetts are entitled to a free credit report annually.
• Budget – The next step is to prepare a budget so you can manage your finances better. Create a list of weekly expenses and a savings goal and compare it to your income. This will help you see where you spend your money and, possibly, if you can cut back as needed. Budgeting will also help you plan for the future, such as saving for your child’s college fund or planning your retirement. This skill will be discussed at length during the mandatory credit counseling prior to the bankruptcy petition being approved.
When your bankruptcy case is closed that doesn’t mean you’re done worrying about your finances. There are steps to take to get back on track: keep all the paperwork from your bankruptcy case, check your credit score regularly, and start a weekly budget. For all your bankruptcy needs, inquiries, concerns, and questions, call the Law Office of Barry Levine at 978-922-8440