When you file bankruptcy, you are usually in a better position to pay your bills than you were before, and can begin to work on creating a brighter future. Depending on whether you filed Chapter 7 or Chapter 13 bankruptcy, many of your debts including medical bills, credit card bills, and car loans are either discharged or reduced. This means that you should have more money available, but you may not know the best way to manage that extra money.
Addressing the Causes of Bankruptcy
Understanding why you had to file bankruptcy in the first place is an important part of the process. Perhaps you spent beyond your means racking up huge credit card balances, or you didn’t have enough money saved for an emergency such as job loss or unexpected medical bills. Working with a non-profit credit counselor can help you identify the problems, and show you solutions that will help you avoid making the same mistakes.
If excess spending was one cause of your bankruptcy, it’s more important than ever to keep debt to a minimum. Living beyond your means is never a good idea, especially in today’s uncertain economy. Plus, since you won’t be able to file for bankruptcy again for another 6-8 years after your bankruptcy is discharged, you don’t want to find yourself struggling to make ends meet again.
Regardless of the reasons for filing bankruptcy, it’s important to start an emergency savings account, by putting away a small amount of money from each paycheck. Eventually you should work toward saving at least 3 months worth of your salary, so that you’re prepared for any emergencies that come up. You should also identify your future goals, such as buying a house or vehicle financing after bankruptcy, so that you can begin saving for those items as well.
Rebuilding Your Credit after Bankruptcy
In addition to keep debt to a minimum and saving money, it’s important to rebuild your credit after bankruptcy. One of the best ways to do that is by financing a used car, and if you’re ready to take that step BankruptcyAutoFinancing.com is here to help. Simply fill out our online application today, to see how much you could be pre-approved for.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.