Knowing that you are unable to repay your debts and that bankruptcy may be the only option in front of you can feel hopeless. To be sure, you may feel as though you’ll never be freed from your debts, and that creditors will be chasing you for all of your life. However, there is hope for the future, and bankruptcy is just one of the steps that you can take on the path towards financial freedom. Learn more about life after bankruptcy by consulting with Massachusetts bankruptcy lawyer David McLoon.
Life After Bankruptcy: How to Maintain Financial Health and Wellbeing
After you have filed for bankruptcy, the worst thing in the world would be to return to a point of financial ruin after you have achieved a clean slate. Luckily, maintaining financial health and wellbeing is very doable. Life after bankruptcy that prioritizes financial responsibility will include a plan for:
- Rebuilding your credit. One of the downsides to filing for bankruptcy is that doing so can be positively devastating for your credit score, and will stay on your credit report for seven to 10 years. However, that doesn’t mean that you can’t start rebuilding your credit – in fact, rebuilding your credit should be one of your top priorities. Rebuilding your credit will likely start with getting some form of credit, which may not be easy – lenders won’t be eager to offer a credit card or loan to someone with historically bad spending habits. You may, however, be able to secure a secured loan or credit card, or start rebuilding your credit by getting authorized user status on a card or having a family member co-sign on a credit card or loan on your behalf.
Once you get a credit card (or a loan), making sure that you use the card wisely and maintain a low monthly balance is important. Most critical, though, is making sure that you pay the credit card on time and in full every month, without exception. If you don’t feel as though you can commit to this, don’t use the card.
- Creating a budget and managing expenses. Another critical part of maintaining financial wellness after filing for bankruptcy is creating a budget and sticking to it. Your budget should be developed by first considering all of your sources of income. Then, consider fixed expenses, like taxes, the cost of your rent, internet and cellphone expenses, etc. You should also factor in the cost of groceries, although note that there may be some flexibility in this based on your habits and purchases that are need- vs. want-based.
Once you know how much money you’re making and how much of it is being spent on fixed expenses, you’ll understand how much you have leftover to save vs. spend. Saving at least 10 percent of every paycheck is strongly advised; a robust savings account can come in handy if you have an emergency.
- Developing smart financial habits. Finally, you’ll want to start developing smart financial habits in general, beginning with not spending more than you make. In addition, saving as much as you can, considering investment options for the future, and meeting with a financial planner may all prove valuable.
Our Massachusetts Bankruptcy Lawyer Is Here to Help
The first step to freeing yourself from crushing amounts of debt may be to file for bankruptcy. After that, you’ll need to actively work to get yourself back to a secure position financially. Bankruptcy lawyer David McLoon can help you navigate the bankruptcy process and make a smart decision. Call today or visit his office online or in person to get started.