Building Back Up

building back up

How to recover from bankruptcy

Bankruptcy can be embarrassing and painful. However, it does give you the chance to start over. Don’t let the hurt from filing for bankruptcy keep you down. Use this as a way 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. One of the best ways 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 an interest-earning savings account until you pay the loan off. Each on-time payment you make will be reported on your credit report, thus slowly improving your credit score.

Another way to rebuild your credit is by applying for a secured credit card. Again, the best deals for these are usually found at credit unions. With a secured credit card, you make a cash deposit that is then used as your line of credit. You can then use it to make timely payments and boost your credit score.

Keep Your Paperwork

Remember to keep all the bankruptcy paperwork, as lenders might ask to see the documents down the road. Items you should keep include the bankruptcy discharge, any communication between you, your lawyer, and the court, and more.

Plan Better

The key to recovering from bankruptcy is to change the habits that led you down that road in the first place. Revise your budget and streamline it. Contribute as much as possible to your savings so that if an emergency happens, you don’t start missing payments and ultimately repeating history. Focus on slowly rebuilding your credit so you don’t get overwhelmed. Take small steps and stay patient, knowing the work you’re doing is going to pay dividends eventually.

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.

Chris O'Shea

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