Building Back Up

Bankruptcy can be a challenging and painful experience. However, it does give you the chance to start over. Don’t let the hurt from filing for bankruptcy keep you down. Use this to set things right. Here is how to get back on your feet after bankruptcy.

Rebuild Your Credit

One of the keys to recovering from bankruptcy is to rebuild your credit.

• Credit Builder. One way to do this is to take out a credit-builder loan at a credit union. As the name suggests, this loan will help you get back on your feet.
  • The amount you take out is kept in a high-yield savings account until you pay off the loan.
  • Each on-time payment you make will be reported on your credit report.
  • This will slowly and methodically improve your score.
• Secured Card. Another way to rebuild your credit is by applying for a secured credit card.
  • Shop around for the best deals, starting with your credit union or local bank.
  • With a secured credit card, you make a cash deposit that is used as your line of credit.
  • Use the card for purchases, just like a debit card.
  • Make all your payments on time consistently to build your credit score.

Keep Your Paperwork

Remember to keep all the bankruptcy files and paperwork, as lenders might ask to see the documents down the road. Items you should keep include:

• Bankruptcy discharge paperwork
• Communication between you and your lawyer
• Any correspondence with the court
• All other paperwork related to the bankruptcy

Get a Fresh Start

The key to recovering from bankruptcy is to use it as an experience to learn from, to change past habits and behaviors, and start again stronger and better than ever before. Here are some steps to help you with the fresh start:

• Create a Solid Budget. Review your budget, revise it, and streamline it. Make it easy to follow so that you can stick with it over the long term.
• Boost Savings. Contribute as much as possible to your savings so that if an emergency happens, you can weather the financial storm without going into debt.
• Rebuild Credit. Focus on slowly rebuilding your credit so you don’t get overwhelmed.
• Be Consistent. Take small steps and be patient, and know the work you’re doing will pay off in the long run.

Do One Thing. Find every bankruptcy-related document and keep them in a filing cabinet. You will likely be asked about them at some point down the road.