After declaring bankruptcy and working to relieve large amounts of debt, many people still find it to be a struggle to get through the event. Whether working to pay off the debt with a payment plan or attempting to rebuild your personal credit score, there are several ways to recover. By practicing a few important habits, it’s possible to regain your financial standing after filing for bankruptcy.
Get a Secured Credit Card
Although it may be difficult to get offers for credit cards after filing for bankruptcy, you can apply for a secured credit card, which uses your savings account or cash as collateral. Secured credit cards are easier to obtain for those with bad credit, but should be paid off monthly to boost your score.
Hire a Professional
With a lack of experience and knowledge of bankruptcy, it can be difficult to recover from the event without the help of a professional. According to Paddon & Yorke Inc., which offers assistance with personal bankruptcy in Toronto, you can contact the U.S. Department of Housing and Urban Development for references on counselors who can help you manage your credit and finances. Local support groups are also available locally to find accountability after filing for bankruptcy.
Monitor Your Credit Score
Keep a close eye on your credit score to look for any errors or red flags that may be present. You can dispute any mistakes or errors that do not seem accurate due to the Fair Credit Reporting Act. You can also obtain free reports on your credit through the three credit bureaus, which include Experian, Equifax, and TransUnion.
Identify What Caused the Bankruptcy
To avoid getting into debt and filing for bankruptcy a second or third time, it’s crucial to identify what initially caused the event and any habits that may need to change. Whether you were unemployed for an extended period of time or had excessive spending habits, it’s important to receive counseling and strengthen your relationship with money. This may involve building an emergency savings fund in the event of another job loss or even switching health insurance policies for more coverage.
By establishing a plan and consulting the services of professionals, it’s possible to regain your finances and strengthen your relationship with money. Although bankruptcy will stay on your record for 10 years, it’s possible to reverse the damaging effects with the right habits established early on.