Like most hard working, responsible people, you paid your bills on time and stayed on top of your monthly budget.
But then a period of hardship arrived and you found you could not meet your financial obligations.
The bills piled up; and creditors called demanding payment. You were overwhelmed and in need of a way out. You filed for bankruptcy and finally were able to take a breath and sleep at night.
That’s the beauty of bankruptcy: It’s the cavalry to the rescue.
It was the last resort, but now that your debts have been discharged under Chapter 7 or reorganized under Chapter 13, and the weight of constant worry removed, you have a chance to make a fresh start and find ways to better handle your finances.
But you find yourself at a loss, not knowing what to do next. To help my clients during this period, I offer a meeting post bankruptcy to educate you on rebuilding healthy credit. I’m sharing a few of those tips in this blog.
Learn how to live frugally
You want to start by learning how to live with less. If you’re honest with yourself, you’ll probably admit that in the past you indulged in impulse buying and took on expenses you could have avoided, such as eating out too often or signing up for an expensive cable television or cell phone plan. Review your past spending habits and identify areas where you can cut back or do without the expense altogether.
Your credit card accounts have been closed, so you’ll be living on a cash basis. That in itself should curb most impulse spending. Without credit cards you are forced to spend within your means. That could mean re-evaluating what matters to you. When you pay cash as you go, every purchase has to be assessed on a needs basis.
Before buying an item, ask yourself:
- Do I really need this?
- Do I already have something like it that will serve the same function?
- If I buy this, what other thing am I willing to not buy so I can have this?
Establish a monthly budget and pay your bills on time
Go over your income and expenses and establish a workable monthly budget, then stick to your budget. Keep track of your bills. Become aware of the amount of disposable money you have to “play” with each month. This is money you allot for a family night at the movies or replacing the broken toaster. Remember to leave a buffer for emergencies and unexpected expenses. Just because the money is there, doesn’t mean you have to spend it.
Start saving and find smart ways to rebuild your credit
When you were swamped with debt, after paying what you could toward your bills, you had nothing left. Putting something aside in savings was impossible. But post-bankruptcy, maybe you can start saving, setting a little aside for the proverbial rainy day. Because you took the time to create a budget and you have trained yourself not to splurge, you may be able to find a few dollars to place in a savings account every time you get paid.
Don’t fall for the many credit card offers you will receive in the mail. Instead, search and apply for a secured credit card with a low interest rate and small annual fee. Once you have the card, use it only for emergencies and pay off the entire balance due each month.
Work With A Bronx Bankruptcy Attorney
I have over 30 years of experience in Chapter 7 and Chapter 13 Bankruptcy in the state of New York. While my office is based in the Bronx, I serve clients throughout New York. If you need a fresh start, call today for a free case evaluation. I’ve helped thousands of families through their bankruptcy, and have provided education on credit health that they’ve gone on to use successfully for years. I can put this same experience to work for you. Call today for a fresh start with a New York Bankruptcy Attorney you can trust.