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8 Things to Know About Re-Building Your Life After Bankruptcy

Updated: Dec 14, 2022

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 after a bankruptcy filing. There is life after bankruptcy. Some people worry that a family member will find out about their bankruptcy case. Although bankruptcy is a public filing, most people don't dig into that. They would need to go through a process to find the information. Here are eight things to learn about rebuilding your life after bankruptcy.




1) What it feels like to file for bankruptcy

Our clients have described the weight of the world being lifted. When they walk out of the meeting of the creditors, the sense of relief is overwhelming. 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

The first step is to determine if you need to file. Get a free consultation from a bankruptcy attorney. They can help you determine if you would qualify and what type of bankruptcy you should file. You will need to get your credit history and credit card account information for credit card balances as well as any student loan, or secured loan debts. Our clients have described the weight of the world being lifted. When they walk out of the meeting of the creditors, the sense of relief is overwhelming. 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.

3) How bankruptcy affects your credit score

Once you file, it is a good idea to start building a budget and a plan so you don't find yourself in the same situation. One of the easiest ways is an app like YNAB. The good thing about an app like this is you can 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.

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 rebuild 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

Once your debt has been discharged, you get the chance at a fresh start both financially and personally. The opportunity to rebuild 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.

7) Don’t put off happiness

The good news is the bankruptcy process is not as scary as it seems and can get you back on the right path quickly. It is perfectly fine to get back to living again. You can get rid of the stress and worry and fix your financial situation. Find all the ways you can enjoy life and activities that fall within your budget. These will grow over time as you get more comfortable with tracking the behavior of your money. Look at your future now, and 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 which you will feel encouraged and empowered.

8) Keep an eye on bills and expenses