What steps should you take after bankruptcy? You have finished your bankruptcy proceedings – now, your debts are either discharged, or you are going through the court-designated repayment program. Regardless, you have been given a fresh start with your finances, which means that you need to play it smart. A large majority of those who successfully file for bankruptcy will end up doing so again, because they do not take control of their new financial health. Therefore, if you want to avoid becoming a statistic, you will also want to take some time to improve your financial future.
First, find a safe place to store all of your bankruptcy documents. These will prove that debts were discharged; you may need them if you are cleaning up a credit report later on. Also, some creditors may attempt to take action against you – even after the debt was discharged. By having proof, you can stop any actions that they may attempt to take against you.
Make a List of Debts That Were Not Discharged
If you have some debts that were not discharged – such as student loans, taxes, or child support payments – then you will want to keep a list of these debts. Do what you can to get these debts in good standing, and keep them that way. Also, keep track of payments that you make to companies for these debts.
If you have any court-issued liens, you will want to verify the amount you owe, and continue to make payments on those debts on time. If you fall behind on those payments, creditors do have the right to enforce those liens and take possession of the property that is under the lien.
Create a Budget and Stick to It
It is now time to look at your income and expenses. You most likely fell into an uncontrollable debt situation due to poor money management. Therefore, you need to establish a budget, and then find ways to stick with it. Most importantly, do not rely on credit cards for regular purchases – such as gas, food, or even paying utilities.
Avoid Credit Card Offers
After you have filed, you may notice that you receive credit card offers in the mail. People like to take advantage of your vulnerability. You need to avoid these credit card offers as much as possible – especially those that guarantee to improve your credit score. These often come with higher-than-necessary interest rates and fees.
As long as you stay on track with your finances, create a budget, and avoid falling back into old habits, you can remain debt-free. Then, you can truly take advantage of your newfound financial freedom, post-bankruptcy.