Once you achieve your bankruptcy discharge, you’ll achieve a second chance. If you want to make the most of it, you’ll need to take conscious steps to change the way that you approach your financial life—even if your bankruptcy was the result of unforeseen circumstances or issues.
Fortunately, there are many ways that you can move forward after you’ve been cleared of all or most of your debts.
Reduce Living Expenses
Now, more than ever, it’s important to live within your means, whatever your new means might be. That might mean moving to a smaller place or a less expensive zipcode. It might mean taking on a roommate or dropping some streaming services.
Only you know what it means for you, but the time has come to build a budget and follow it. Make sure you leave room in your budget for savings.
Save for Emergencies
Your entire financial life will change when you have several months of income in the bank to pad you against major emergencies and life issues. Adopt a habit of paying yourself first, even if you have to put your savings on auto-pilot.
The right savings account can even help you build your credit without adopting new debt.
Focus on Paying Off Everything Else
You’ve freed some room in your budget now. Before you take on new debt or worry about buying your next home, it’s time to focus on paying off significant portions of student loans or other debts that can’t be discharged.
If you can avoid taking out any debt at all, even a car loan, you can leave that wriggle room in your budget and make your financial future even stronger. Regular, on-time payments will build your credit better than anything else, so focus on taking this step even before you think about getting a secured credit card.
Buy in Cash
Try to save for big purchases instead of buying them on credit. You’ll find buying in cash creates far less chaos in your life than buying on credit ever did.
Here’s the truth: it will be years before you can file again:
- 8 years for Chapter 7 after Chapter 7
- 6 years for Chapter 7 after Chapter 13
- 4 years for Chapter 13 after Chapter 7
- 2 years for Chapter 13 after Chapter 13
You no longer have the “out” that other people have, so you need to focus on making the most of the “out” that other people have received.
Haven’t filed yet?
Our firm offers free consultations! If you’re ready to taste financial freedom at last, contact us to schedule your one-hour consult today.
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