Now that you've filed for bankruptcy, what's next? You've obtained a fresh start after filing for bankruptcy, and now you want to secure your financial future so this never happens again. But where and how do you begin? This article will discuss the measures you can take to rebuild your credit so that you can regain control of your finances.
First and foremost, ensure that ALL of your expenses are paid on time. This is crucial following bankruptcy. The quicker you demonstrate responsibility by paying your expenses on time, the quicker your credit score will improve. In addition, as time passes and you build credit, the effects of bankruptcy will diminish. However, if you miss a payment or are sent to collections after filing for bankruptcy, your credit score will take another hit, and lenders will continue to view you as a risky borrower.
Create and adhere to a budget to keep your spending under control. You don't want to repeat the error that caused you to file for bankruptcy in the first place, so creating a budget is essential to ensuring your financial stability. The first step in developing a budget is determining your monthly income average. Include overtime pay and incentives on your list of sources of income. Next, you will need to enumerate all of your monthly expenses to determine how much you spend each month. You should retain all your receipts and bills and record the exact amounts so that you are aware of how much you actually spend each month as opposed to guessing. Many people underestimate how much they spend, and some expenses (such as petroleum, electricity, taxes, etc.) fluctuate throughout the year. By recording the actual quantities, you can determine whether you are living within your budget or exceeding it. You will also be able to observe trends in your spending, allowing you to identify areas where you can save money and modify your budget accordingly.
Even if the amount is small, you should begin saving for an emergency fund. In addition to ensuring that you pay all of your obligations on time after bankruptcy, you should also make establishing an emergency fund a top priority. Once your budget is established, you should begin setting aside money each month for an emergency fund. While it is unlikely that you will be able to save enough to cover 3 to 6 months of expenses, you can at least begin saving for minor emergencies. It's impossible to predict when an unexpected expense will arise, so you'll want to be prepared.
Obtain a credit card that will assist in rebuilding your credit. Consider obtaining a secured credit card as a means for reestablishing credit. A secured credit card is a form of credit card that requires a cash deposit, which serves as the credit limit. You can only charge what is available on the card, so watch out for fees and other charges. You should look for a credit card with no application fee and lower interest rates and fees. If you are a member of a credit union, inquire about secured credit cards, as they typically have lower interest rates and fees. If you are able to establish a positive payment history, some institutions will increase your credit limit, and you could qualify for an unsecured credit card within a year. Ensure that your card payment history is reported to credit bureaus so that it positively impacts your credit score.
Do not berate yourself for your current situation. If you have declared bankruptcy, know that you are not alone. Numerous individuals have been or are currently in this circumstance. This is a difficult time in your life, but it will not last eternally. You don't have to let bankruptcy define you. Consider this a transient setback and anticipate the opportunities of the future. The purpose of declaring bankruptcy is to regain financial stability and a fresh start in life. Create a new path for yourself and make the most of the opportunity you've been granted.""
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