Life After Bankruptcy

In order to recover from bankruptcy, the first step is the realization that declaring bankruptcy hasn’t been the end of the road for you. You’ll need to make a few adjustments in your life, in order to get your life back on track. Here are some pointers to help you on the road to a financial fresh start:

1. Learn to make sound financial decisions. Sound financial decisions should become your new way of life. Set a budget.  Strictly Adhere to it.  Learn about personal financial management.  Keep track of every penny of income and expense in your life, and live within your means.

2. Find the root of the problem. Was the problem overspending, a health-care crisis, unemployment or something else?  Sometimes, nothing can be done about the root cause that led to bankruptcy.  But if your problem was overspending, or budgeting, then you can rectify that.  For example, The Wall Street Journal has an interesting section with various guides that can help you make better decisions: Wall Street Journal Guides

3. Build a cash reserve. Start with a checking account and slowly put money away into a savings account on a regular basis. Initially, it may be difficult to open an account, as some banks may run a credit check.  Try a few banks, and build your cash reserve.  It is an important step to preventing a future bankruptcy.

4. Keep up with your bills. After bankruptcy, it is paramount to pay all your bills on a timely basis in order to begin rebuilding your creditworthiness.

5. Establish Good Credit. Apply for a credit card, but use it wisely and within your budget.  Pay off your balance every month, and ensure that you’re never late.