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How to Recover from Bankruptcy

21 October 2015 No Comment

canstockphoto9491798When you file for bankruptcy, you might feel like a weight just lifted off your shoulders, but you may worry about what the future holds as well. Though a bankruptcy will remain on your credit report for a significant period of time, it won’t necessarily harm you as much as you might think. Learn how you can recover from bankruptcy as you get back on your feet.

Apply for New Credit

When you first file, you’ll find that getting a new credit card is difficult. The only offers you receive may come from companies that charge a high interest rate or a fee for using the card. Store credit cards are generally a good way to rebuild credit, especially if you make regular purchases and pay off your credit over time. You can also use secured credit cards that you tie to your bank account or a piece of property to build up your credit.

Check Your Credit Report

Checking your credit report is one of the most important things you can do after filing for bankruptcy. Make sure that all the debts and accounts the court eliminated from your record do not exist on your credit report. Once your bankruptcy goes through, your credit report should show that you filed, but it should not list any delinquent accounts or late payments. You can contact the credit reporting bureaus to request that each one remove any of those accounts.

Set a Budget

Whether you filed for bankruptcy because you lost your job, went through a foreclosure or had medical problems, you need to take a good look at your financial situation once your filing goes through. Now is the time to create a detailed budget that shows you how much you can afford to spend on different things. Set aside the money you need to pay your mortgage, car payment, utility bills and any other bills that come in every month. You can place a small amount in savings for an emergency and spread the rest out among your other expenses, including groceries and stuff for your kids.

Take Financial Classes

It’s important that you understand the mistakes you made in the past that led to you filing for bankruptcy. Taking financial classes can help you get a good idea of where you went wrong and what you can do to keep yourself on track in the future. Community colleges and adult vocational schools often offer these classes, but you’ll find some similar classes that you can take online. Use your mistakes as feedback that will help you in the future in the same way that ian mackechnie amscot financial leader did.

Know When You Can Buy

A bankruptcy will generally stay on your credit report for seven years or longer, but that doesn’t mean you need to wait seven years before buying a new home. HUD offers programs for those working in certain professions and those who meet other guidelines that let them buy homes just two years after filing. You’ll also find government programs that guarantee your loan and let you borrow from different lenders. The FHA offers many programs that help those who filed for bankruptcy obtain a home loan. Though filing for bankruptcy may be hard, it can help you escape from your previous debts and secure your financial future.

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