Once you have decided to get rid of your debts through bankruptcy, you need to consult with your lawyer regarding whether chapter 7 or chapter 13 would be your best way to get rid of debts. Once you are through with a bankruptcy, it is important that you develop a strategy to avoid financial strain like this. Dallas based bankruptcy law firm Recovery Law Group provides you with a few simple steps that could make a huge difference after bankruptcy.
1. maintain records
Despite them reminding you of bad financial times, you need to keep your bankruptcy documents in a proper manner. This is to ensure that your creditors do not collect on discharged debts, or your credit reports mention the debts properly. In case you lose your bankruptcy papers, you might have a difficult time proving bankruptcy discharge and prevent creditor harassment. Additionally, getting copies of the documents will be difficult if you lose them.
2. check credit report
Though your bankruptcy is automatically stated on your credit report, there maybe be chances of discrepancy when it comes to debts discharged in bankruptcy. It is important to check your credit report from time to time in order to confirm that your debts are mentioned correctly. If this is not the case, you can contact the concern credit reporting agency to show that your debts for debts were discharged due to bankruptcy. You can do so by mailing them a copy of your discharge letter mentioning the debts discharged in bankruptcy.
3. live within means
Though it is not necessary that overspending caused your bankruptcy, establishing a monthly budget and living within it is one of the best ways to get your finances on track. Try to avoid unnecessary expenditures and continue paying your non-dischargeable debts.
4. change your spending habits
Differentiate between essential expenses and luxury ones. Eating out is not normal, it is a luxury on which you are wasting money which could be utilized elsewhere. Keep your expenditures to the minimum if you wish to crawl out of the hole bankruptcy has thrown you into. Avoid using credit cards for unnecessary expenditures if you wish to avoid the vicious cycle of debt and bankruptcy.
5. work on rebuilding credit
If you think that getting a credit card is all it takes to mend your credit then you are mistaken. Just like you don’t ruin your credit in a day, you can’t build it either. Start with a secured credit card and make payments on time using it. Avoid getting many credit cards as you will lose track of payments. You can build your FICO score (used by credit reporting agencies to determine your credit risk) by making timely payments.
6. save for a rainy day
Ensure that you have an emergency account where you put money every month for sudden unexpected expenditures as these are the reasons why you ended up filing for bankruptcy in the first place. Make sure that you contribute regularly to this saving account, irrespective of the amount.
Though bankruptcy ruined your credit, it does not need to remain this way forever. You can take corrective measures to improve your credit score. You can direct your bankruptcy-related queries to experienced bankruptcy lawyers at 888-297-6023.