If your financial situation continues to spiral out of control, it’s imperative to stop the bleeding as quickly as possible. For many individuals, Chapter 7 bankruptcy is the best solution to this problem.
Even though it’s difficult to project what will happen in the future, life after Chapter 7 bankruptcy exists. And if you play your cards right up front, you’ll find yourself in position to better enjoy yourself down the road.
Here are the types of financial steps you should prepare to take after a Chapter 7 bankruptcy filing:
- Create a budget: You know what led you to Chapter 7 bankruptcy in the first place. With this knowledge, it’s critical to create a budget to help keep you on track in the future. Using the same budget as you did pre-bankruptcy is likely to lead you down the same path.
- Rebuild your credit: There’s no denying the fact that a Chapter 7 bankruptcy filing will harm your credit score. Also, it remains on your credit report for 10 years. Even so, you can take a variety of steps to rebuild your credit. Pay your bills on time, use a secured credit card and review your report for any errors. It’ll take time, but you can slowly begin to build your score from the ground up.
- Avoid excessive debt: Most people who file for Chapter 7 bankruptcy do so because they’re bogged down by debt, such as credit cards, personal loans and car loans. While you may not be able to avoid debt entirely in the future, you must keep it in check. This goes along with creating a budget. When you know what you can afford each month, you can avoid a situation in which you overextend yourself.
Deciding to file for Chapter 7 bankruptcy is a big step in your life. With so many benefits, such as the ability to discharge many of your debts, it may be just what you need to get your finances back in order.
As you prepare for Chapter 7 bankruptcy, make note of the steps you’ll take in the future to create the financial life you want.