10 Tips For Recovering From Bankruptcy
Bankruptcy is a common concern and something loads of people face every year.
This doesn’t have to be the end of the world. The goal is to readjust your approach to money management and start making the right choices.
Here are some of the most important tips to keep in mind when recovering from bankruptcy.
10 Tips to Recovering from Bankruptcy
1. Stop Accumulating New Debt
This is the first thing to focus on.
Stop collecting new debt whether it is a loan or using a credit card. Any loan you are going to get now will have an absurd interest rate, which will only make things worse.
Just ignore this as an option until you rebuild your credit score.
2. Check Your Credit Score and History
Always take the time to monitor your credit score and history. Make sure the information on file is correct and then regularly check the score to see whether or not it changes.
This will help a lot as you learn more about your finances.
3. Make Debt Payments Every Month
You should always make your debt payments.
Skipping months is not a good idea and will lead you down the wrong path again. Recovery is all about creating good habits and it starts here.
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4. Keep Balances Low
You should always look to keep your balances low.
When you start racking up too much debt, the interest payments will spiral. It is important to keep the balance low by making regular payments and cutting down on debt-related purchases.
5. Set a Budget
Budgeting is a must.
You will have to learn to account for your expenses and income. Make sure you record everything in a journal. This will let you see where you are spending too much.
6. Accumulate an Emergency Fund
You should always try to set up an emergency fund.
Even $5,000 will go a long way as you start saving up. Add a little bit every day and you will have a good amount in your account for a rainy day.
7. Get a Secured Credit Card
A secured credit card is great as it uses your funds as collateral.
This makes it a lot easier to make purchases on a credit card without overdoing it.
8. Don’t Rush Your Payments
You should never rush your credit payments even if it seems like a good idea.
It is best to wait until a few days before the due date as that will allow you to save money for other things. There is no real benefit in paying it faster or earlier in the month.
9. Build Your Credit Score With Small Debts
You will have to rebuild your credit score as it will get ruined by bankruptcy.
This means you will want to start taking on small debts (i.e. $10 credit card purchase) and then pay it off right away.
This will begin to show you are capable of making debt payments on time.
10. Use Cash
Cash is your best friend.
You will want to learn how to rely on cash because it’s money you have in your possession. Don’t always look over to your credit card as that is how you accumulate debt rapidly.
Just make purchases with cash and hold your hand if you don’t have enough in your wallet.
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Call to schedule your Free Bankruptcy Consultation!