A common question we get asked is, "Will I be able to rebuild after filing bankruptcy?". After all, most people don’t expect the word rebuilding to be part of their story if they file bankruptcy, especially right after someone has filed bankruptcy. There is life after bankruptcy. Here are eight things to learn about re-building your life after bankruptcy.
1) What it feels like to file bankruptcy
Our client's have described the weight of the world being lifted. When they walk out the meeting of the creditors, the sense of relief is overwhleming. When the debt is gone and the clean slate is in front of you, there are endless possibilities. The worries that have been plaguing your life for months or years seem a million miles away. It was all too much before bankruptcy, but once it’s filed it feels like just another bump in life’s road. For many people filing bankruptcy is just one obstacle on their journey towards financial freedom; it might be 5 years later that we cross paths again when they want to plan for retirement or buy a home.
2) Learn from your mistakes
Once you file, it's time to start building a budget and a plan so you don't find yourself in the same situation. Get an app like YNAB. Track all of your income and expenses and begin putting some money aside. This could be as simple as cutting down on Starbucks or Netflix and socking that cash away. You'll be surprised how quickly savings can add up. And remember, if you keep living on credit with no way to pay it back, bankruptcy is always an option down the road . . . but do everything possible to avoid taking that route because nothing will hurt your future more than being labeled as a repeat filer—at least not from a financial standpoint.
3) How bankruptcy affects your credit score
The myth behind your credit being ruined is just that; a myth. There are plenty of ways to get back on your geet again. The best part about filning with us is you get access to the 7 steps to a 720 credit score program. This program teaches you all the steps to getting your credit back on the right track. What most people don’t know about bankruptcy, is that it doesn’t last forever. Once you rebuild and re-establish your credit, it will stay in good standing for 10 years after discharge. So after bankruptcy , rebuilding is possible and there’s no shame in starting over.
4) Look at the bigger picture
Once your debt has been discharged, you get the chance at a fresh start both financially and personally. The opportunity to rebulid and start again is more valuable than you can imagine. There will be no more creditors calling to harass you, no more stress of wondering how you're going to pay the bills, and you will begin to save money and reorganize your finances. It's not uncommon for people to feel as though their bankruptcy was life changing; in most cases it just means starting over with your financial habits and goals firmly in place. You may also find that other parts of your life change as well once your debts are gone—your relationships, career, outlook on life—and many people who've gone through bankruptcy say it's one of the best things they've ever done for themselves.
5) Take stock of your situation
Its time to evaluate your finances carefully. Using a budgeting app will help you see what your money is doing. Track your dollars and get your money to work for you. Review all of your expenses and decide where you can cut things out until you can get to place where you are saving. Make room in your budget for things that make you happy, but don’t overdo it. If you find yourself overspending on these items, create a separate sub-budget within your main one that shows how much you spend on these items each month so that it doesn’t eat up too much of your income.
6) Avoid Regretting Your Decisions
Don't make any hasty decisions. Give yourself time to see where you stand and how your money is going to work. The goal is to get to a place where you're able to pay bills easily and start saving again. You might find that it's too soon to consider bankruptcy or that you can recover financially on your own before you file bankruptcy. Either way, it's important not to regret your decision, so do everything in your power not to just react but rather strategize and find out what's best for you, what will give you peace of mind—and then act decisively based on that knowledge.
7) Don’t put off happiness
It is perfectly fine to get back to living again. You can get rid of the stress and worry. Find all the ways you can enjoy life and activities that fall within your budget. These will gow over time as you get more comfortable with tracking the behavior of your money. Look at your future now, make plans for it. Focus on where you want to be in 6 months or 1 year from now. No one ever said having a positive future was easy but if you work hard enough toward it, it can be achieved. Don’t let your past failures prevent you from setting goals for yourself for a better future because failures build character and help us learn from our mistakes which prevents us from repeating them again in our future endeavors. If we were not allowed to fail we would never try new things and would never push ourselves out of our comfort zone. Each failure we have builds our character a little bit stronger until eventually we become an unstoppable force. Take these tips today and implement them into your daily routine so that they will stick with you forever. Then, when life gets tough in the future you can look back on these tips and remember how they got you through the roughest patch in you will feel encouraged and empowered.
8) Keep an eye on bills and expenses
Know what you're expenses are. Cancel unnecessary subscriptions, evaluatate any plans you might be on, and cut back costs where you can. Keep track of these in your budget and if you can cut things out, you will make way for more savings. The trick here is finding ways to spend less without making too many sacrifices or feeling like a martyr. This is a balancing act but it does get easier over time. Apps like You Need A Budget (YNAB) to help monitor your spending. But remember that setting up a budget doesn't mean depriving yourself; budget doesn't have to sound so dreary when we think about saving up money for all our favorite indulgences down the road. Create new habits: Another part of building after bankruptcy is working on creating new habits and lifestyle changes that stick with you through thick and thin. When you get into debt, one of your goals should be to pay off those bills as quickly as possible—and one way to do that is by changing your shopping and spending habits. If you have a history of racking up credit card debt because of online shopping sprees or impulse buys at department stores, try avoiding those situations until you've established better control over your purchases.
The answer yes...
There is life after bankruptcy. We ready to help you take the next steps to your financial success. Get rid of stress. Get rid of worry. Get a free case evaluation today.