Are you one of the 755,000 Americans who filed for bankruptcy last year? If you are, you probably found out that bankruptcy is not the end of the world. In fact, the relief from harassing calls from creditors and the onslaught of bills can be freeing. Now that you have a financial clean slate, it is time to start planning your recovery.
Bouncing back from bankruptcy might not be easy, but it is doable. One of the first things that many filers want is to do is build credit and learn from the financial missteps that brought them to bankruptcy in the first place. Here are a few suggestions of how you can begin the recovery and repair process after bankruptcy.
Immediately following a bankruptcy, it is important to request a free credit report. This will ensure that all the debt that was included in the bankruptcy is noted as such on the report, not hanging out there as an unpaid debt. It will also give you a sense of where you need to build from, as your credit score has likely taken a hit due to the bankruptcy. If you do find that there are errors, correct them in writing to the creditor. Monitor your credit report regularly from here. Some people find that a credit monitoring service is very helpful at this stage.
Many people who file for bankruptcy understand that it was caused by something out of their control such as a medical emergency, divorce, or perhaps the loss of a job. But if your bankruptcy was caused by chronic overspending or gross mismanagement of your income, then gaining insight on how this can change is imperative. Financial counseling can help with creating and sticking to a budget. It can help set up automated monthly payments for your bills and teach you how to manage credit.
After a bankruptcy, your credit score will be impacted for years to come. With every positive step you take, such as building your credit, the impact will fade. Start by building your credit with a secured credit card. A secured credit card means that you’ll use your own money as collateral by paying a refundable deposit to your lender. The amount you deposit is your credit limit. This is a great way to show that you can pay your bills on time and regularly. Many lenders allow clients to move up from a secured credit card to an unsecured card either after a certain amount of time or a certain number of on-time payments.
For most Americans, filing for bankruptcy was caused by some sort of emergency. Now that you have a clean financial slate, start to plan for those emergencies. Research by the Urban Institute shows that having as little as $250 in savings for an unexpected expense can protect families from resorting to payday loans or running up credit cards, which can start a new debt spiral.
Are you trying to recover from bankruptcy? Look into credit counseling, repairing credit scores and moving forward from bankruptcy. Call the Law Office of Barry R. Levine today by phone at 978-922-8440, or visit our website at http://levinelawoffice.com.