Helping With Your Financial Future

How can you recover after bankruptcy?

On Behalf of | Jun 13, 2022 | Life After Bankruptcy

Many Californians who struggle with debt end up filing for bankruptcy. If you’re one of them, you might wonder what might happen after you file. These tips can help you recover after bankruptcy.

Keep all your paperwork

After filing for bankruptcy, you should keep all your paperwork in a safe place where you can access it in the future. Sometimes, lenders or collectors might contact you about your previous debt. Having your papers in order can help you get the information they request. It also serves as proof that certain debts were discharged in your bankruptcy case.

Save money and create a budget

Saving money after bankruptcy is crucial. You want to avoid the cycle of debt, which means you should get into the good habit of saving. You should also create a budget for your spending moving forward. Make note of all your regular monthly expenses and what you have left over. It can help you get a fresh start with your finances.

Rebuild your credit

After bankruptcy, you have reason to worry about your credit. While your credit score does take a hit, you can work on rebuilding it by engaging in good habits. Pay all your bills on time and in full. If you have to open a new credit account, consider applying for a secured credit card that works on a deposit of your own money. Being responsible while using a secured card can help you to gradually improve your credit so that you can eventually switch to a regular, unsecured credit card.

Keep your job

If you still have your job after bankruptcy, keep it. Your income is regular and predictable, so you are in a much better position to pay bills and debts. Maintaining a job also shows potential lenders that you have a steady stream of income, which gives you a better chance of being extended a loan or credit.