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Steps to take after bankruptcy

On Behalf of | May 18, 2020 | Chapter 7

Filing bankruptcy can bring much needed financial relief, but once it is over, you will need to rebuild your finances and credit. 

If you want a better future without new debt trouble, you need to devise a plan for the steps you will take after your bankruptcy discharge. 

Check your credit report 

Make sure that you check your credit report after your bankruptcy to see if all debts came off. You also want to get an idea of where your credit score lies. 

Experian explains that after a Chapter 7 bankruptcy, you should not have remaining debt on your credit report except for those you could not discharge in the bankruptcy, such as student loans. You will have a new entry on your report for the bankruptcy. So, you may see an initial surge in your credit score from the debts coming off, but once the bankruptcy goes on, your score will dip. 

Plan your budget 

You also need to plan out your budget to ensure that you are earning at least as much as you are spending. Your goal is to ensure that you can pay for all your essential needs every month without having to resort to debt. Your budget allows you to see where your money is going. You may find areas in which you can reduce expenses to help balance your budget. 

In addition, you want to build savings to help with unexpected expenses. It can take time to balance your budget to allow for these things, but this is an essential step to avoiding financial issues. 

Use credit wisely 

If you do obtain a credit card, use it wisely. Never charge more than you can pay back when you get your statement. If you find yourself charging expenses that you cannot pay off, then you need to revisit your budget and adjust your expenses to ensure you avoid accumulating more debt.