I was reading some articles and it seems that one of the most important questions people have about bankruptcy is not the decision to ask it or not, but also to stop it in the future after they ask it. In this article we will talk about what bankruptcy means (specifically Chapter 7: liquidation) and what can be done after you are bankrupt to reorganize your life and make sure that this does not happen again.
Bankruptcy or bankruptcy is one of the legal rights you have to tell your creditors that unfortunately you don’t have enough money to pay them. You deliver all your possessions of value and title (they cannot take your television because there is no legal proof that it is yours) and you have to start from scratch. You talked to lawyers or did the process yourself and after all you ran out of money owing the creditors (unless they are student loans or government debts); and you are ready to rebuild your life.
Make sure it doesn’t happen again
For some people the bankruptcy process was totally something that could not be done to avoid it, the debts were necessary things but the economic crisis took all the savings, all the years of a healthy financial life and impeccable debt management. To the surprise of us, the financial advisors are that there are much more cases that deal more with people who did not know how to manage their debts, they thought that credit cards were free money that only paid the minimum, they had no savings and when they came to Realize the monthly payments of debts were more than the income of the house.
In any case, it is important to start by taking personal finance courses (there is free on the internet) and learn how to live without debt as something necessary in our lives. Many people think that fixing credit is the only thing necessary to get out of bankruptcy, but you have to fix your savings and money management habits too.
First Step: Have a Personal Budget
Having no credit, everything you buy will be cash, and you have to make sure that the income you have is planned for large purchases made during the coming months. A simple budget is: how much you earn – [how much you save + less how much you spend], keep in mind that saving goes first than your expenses. With a budget you can know how much money you can spend and how many you can allocate for the next purchases and for any emergency you have. You can visit How to Make a Personal Budget for more information.
How to repair my credit after bankruptcy?
Here is the point where good management of your finances and a savings plan will help you. Your bankruptcy will affect your credit for at least 7 to 10 years. But this does not mean that you cannot start putting good information in your report. There are many banking products that go to your credit that you can do without any consideration to your credit history, the main reason is these products are your own money that you give as a guarantor to the bank. The most effective way you have to restore your credit after bankruptcy is by opening a secured loan or a secured credit card. If you do these for a period of two or three years, the credit offers will begin to arrive to your mail again, but be careful, these offers were the ones that put you in the roll in the beginning. Visit the 10 Commandments of Credit Cards to find out a more effective way to handle them.
And how do I not go bankrupt again?
I hope this doesn’t happen to you again, but we don’t know about tomorrow. The key is that you do everything possible to lead a healthy financial life: Saving, buying cash, saving, living below your income, using credit with a plan, etc. Educate yourself with books, blogs, websites, how to keep your finances in order, at the end of the day bankruptcy will be just a shadow of what was another life.
Have you left a bankruptcy or bankruptcy? Leave a comment (or two) about your experience and how to help other readers.