How to Recover your Finances After Bankruptcy?

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How to Recover your Finances After Bankruptcy?

Bankruptcy is a hard chapter in an individual’s life, however, a very long road lies ahead after your case wraps up. Any and all financial decisions you make after the bankruptcy case is over are going to be equally important. For regaining control of your finance, it is important that you consult bankruptcy attorneys such as those available at Los Angeles based law firm Recovery Law Group.

Tips to Rebuild Credit after Bankruptcy Case

The most important point to take care of, once you are through with your bankruptcy case is to clear your financial dues and start fresh. It is easy to start a fresh credit score by using the following tips:

Check Credit Reports

There are 3 major credit report bureaus that need to be monitored closely – Equifax, TransUnion, and Experian. Monitor your credit reports with them, as they keep a record of all your bankruptcy activities. Any bankruptcy records will be reflected on your credit reports, thus your discharged debts should also be reflected in the same. Creditors should ensure that they update your debts in a 3-6 months’ time frame. Anything inaccurately mentioned on your credit report should be reported immediately and efforts should be made to rectify any issues.

Endorse Debts You Wish to Pay Post-Bankruptcy

Filing for bankruptcy can take place under various chapters, some of which allow you to keep your home, car and any other property too. You can continue making payments for the same after your bankruptcy. The creditors would want you to confirm or legalize those debts. This can be done by sending a formal letter to them or mailing back the form which has been mailed by the creditor. With this option in place, you can easily keep your property after bankruptcy.

Avoid Accumulating Further Debts

Once the proceedings for your bankruptcy case are finalized and all your dues cleared, you will be followed by many new creditors to offer new credit cards, loans or any other forms of debts. It is important to avoid getting back into the financial mess that you have just gotten out of. Unless you can afford a debt or it can improve your financial situation (read, credit report) you should avoid any unnecessary debts. It is important to work in tandem with a financial advisor to help you keep on the correct path financially after bankruptcy.

Rebuild Credit Report

Filing for bankruptcy can cause you to have a less credit score making you a bad debtor. However, once you are out of the mess, you can take adequate steps to build your credit score. After completion of the majority of your debt, start by building a budget to establish good credit habit. This can include getting a secure credit card, a car loan or a gas card after your bankruptcy. Not only do they help improve your general credit score but also improves your condition in life too.

Keep Bill Payments on Time

Bankruptcy should serve as a learning chapter in your life. You must be more careful with your credit post your bankruptcy proceedings. Make it a point to make bill payments on time; consult a financial advisor if handling your budget and paying bills is too complicated for you. It is important to have enough money with you, every month to pay any due bills on time. Professional assistance can help keep your financial problems at bay.

Fix a Budget for Every Month

Credit counseling courses can be extremely effective for people who despite bankruptcy find it difficult to keep to a fixed budget. Taking a budgeting course can help you learn more about finances and bankruptcy so that you can stick to a budget and use your income wisely. This ensures that you don’t end up in debt again.

What is the Duration of the Bankruptcy Process?

You can start your life with a new resolution after the bankruptcy proceedings. However, the time taken for it varies, depending on which chapter a person or company files for bankruptcy under. In case of a chapter 7 bankruptcy, the time taken for finalization of bankruptcy and discharging of your remaining debt is 4-6 months. This duration varies depending on the time taken to complete paperwork and the hearings. For chapter 13 cases of bankruptcy, the duration is between 3-5 years or when you complete the payment plan.

Despite the fact that your bankruptcy will be reflected on your credit report, you can start renewing your credit right away. The above-stated methods go a long way in helping you improve your credit rating and keep a clean financial slate too. Ask any bankruptcy attorney on how the proceedings can affect your life as well as about efforts to rebuild your life after bankruptcy.