Call Us: (212) 336-1440-556

How Can I Bounce Back From Bankruptcy and Re-Establish Credit?

Chapter 13 Bankruptcy Lawyer

Anyone who has been through bankruptcy may wonder how they are going to overcome such a financial setback. Despite this new financial status, bouncing back from bankruptcy is possible. The truth is, it may take some time before a person can get to the place of financial stability they hope for, but it isn’t out of the realm of possibility. One major way that many people find their way out of bankruptcy (or at least make the best of it for the time being), is by consulting with a lawyer who is knowledgeable in bankruptcy legalities. A legal professional can provide insight and tips for how to eventually bounce back from a bankruptcy status. A lawyer may advise you to consider following these strategies for re-establishing credit:

#1 Create a Budget and Stick to It

Sometimes people find themselves in a financial rut simply because they don’t realize how much money they are spending on certain things. For example, you may track your expenses for a few months and find out you pay way too much in frivolous monthly subscriptions or memberships. While each month it may not seem unaffordable, how much it totals at the end of the year may be surprising. Once you are aware of your spending habits you can then make adjustments, and create a budget that aligns according to your income. The very first step to bouncing back from bankruptcy is to set boundaries on spending and get support from a financial advisor if needed.

#2 Practice Using Cash Instead of Card

In today’s society, rarely do people have a plentiful amount of cash in his or her pocket. Debit and credit cards are used more often on average when making purchases than cash. It may be easier to run a card and not have to visualize the money actually being taken away. Many people find that when they use cash, they understand the depth of their purchases more acutely.

#3 Check Your Credit Report

You may want to sign up for a credit report website or application on your phone, that alerts you when your credit score goes up or down. This can be a useful tool that reminds you to monitor your credit score. The service you use may even offer tips and suggestions for how to raise your credit score. Credit scores can intimidate people, but this rating can fluctuate throughout life. The credit score you have now, may not be what you have six months down the line, as long as you are keeping up making payments on-time to creditors.

#4 Get a Secured Credit Card

After filing for bankruptcy, it may become challenging to get approved for standard credit cards. A great way to strengthen credit is to get a secured card. How it works is, the bank holds your money and provides you with a charge card with a limit for that equal amount. When you close the account, you receive your deposit back. As with any credit card, don’t be so desperate to get a card that you skip the fine print and sign before you understand what you are agreeing to.

Source: Chapter 13 Bankruptcy Lawyer Bloomington, IL, Pioletti & Pioletti

Close Menu