More often than not, circumstances cause people to take debts which they are unable to clear. Since debts keep on piling, the only solution to get respite from threats from creditors is filing for bankruptcy. Individuals, as well as business organizations going through a bad financial phase, get a new lease of life and a fresh financial start thanks to bankruptcy. However, bankruptcy lawyers of Sacramento based law firm Recovery Law Group suggest some tips for debtors to follow after their bankruptcy case are closed and all their debts discharged:
Ensure that you live within your means. Getting out of bankruptcy is a traumatic and life-changing experience. It is important that you value your financial independence. Do not over-extend your budget and depend on your income.
Keep an emergency fund which should be at least 10% of your income. Debtors coming out of bankruptcy should keep a contingency fund specifically for emergencies like medical etc. Keep 3 months of expenses in a bank account so that you don’t have to depend on loans and debts in case of unexpected emergencies.
Health insurance is extremely essential if you wish to avoid spending your emergency funds on medical expenses. Medical debts are some of the most common reasons for bankruptcy. Pay a little extra for good quality health insurance so that you do not have to face another bankruptcy.
Despite myths associated with bankruptcy, getting a credit card to rebuild your credit rating is possible. As a matter of fact, rebuilding your credit is extremely important after bankruptcy. To create a good credit history, you need to take secured credit cards, which most credit companies are willing to provide people post-bankruptcy.
