Most people who file for bankruptcy are often afraid of what the future holds for them. This is simply an irrational fear of the future and nothing else. Even after being bankrupt, people can still live very happy lives. However, they will need to make certain adjustments in their life that will allow them to live it responsibly. And in this post, we will look at seven specific things that you should do after being declared bankrupt.
1. Set Up A Monthly Budget :
The first thing to do is to bring your spending habits under control. After all, you don’t want to be irresponsible with your spending habits right after you have been declared bankrupt. What you now need to do is to set up a clear-cut monthly budget. It is better if you limit your expenses to about 80% of your monthly income. Doing so will allow you to save the remaining 20%. And over time, you will develop a habit of saving up money, which is a critical skill upon which to build your life.
2. Pay Bills On Time :
You should also ensure that you pay all the bills on time. This includes the electricity bill, phone bill, water bill, internet bill, and so on. For one, this can affect your credit score. Though such utility bills do not report anything when you make the payment on time, they will report in case you are late in bill payment. And starting your post-bankruptcy life with some negative points in the credit report is definitely not recommended. The second benefit is that by ensuring your bills are paid on time, you will eventually develop a disciplined mindset that will make you to more careful with your money.
3. Avoid Taking New Debts :
Never take any new debts, at least for a couple of years after bankruptcy. Work hard, save some cash and then buy what you want. For example, you may want a new gadget that costs $900. With a credit card, you would have bought it immediately. But that also means that you take an additional debt of $900. And this is the sort of behavior you should stay away from. Instead, save $100 for nine months and then buy the gadget with the savings. By keeping yourself away from taking new debt and by focusing on buying what you want from your own hard earned money, you will become more responsible in your life.
4. Check Credit Report :
You should also watch your credit report very closely. Since you have recently been declared bankrupt, that would have dragged down your credit score massively. As such, now is the time to focus on repairing your credit score. Look out for any incorrect information that ha a negative effect on your score. When you find any, report it to the credit agency and get it corrected.
5. Heed The Lawyer :
After you have been declared bankrupt, your lawyer will give you some specific information you will have to follow. Make sure that you do follow it 100%. Bankruptcy lawyers have years of experience backing them. As such, if they ask you to do something that will help you post the bankruptcy, you will be better off heeding their advice.
6. Secured Credit Card :
It is also a good idea to apply for a secured credit card. And by putting down some money to obtain the card, you will score some brownie points in your credit score. However, do keep in mind that this card does not function in the same way like a regular card. While a regular card will allow you a credit that you need to pay back later, an unsecured credit card won’t offer any such credit. Instead, its usage limit is very much dependent on the money you put down. If you provided $1000 as collateral to the card company, they will issue you an unsecured credit card worth $1000. You cannot use it to but anything valued at more than $1000.
7. Savings Accounts :
You must also deposit your money in a savings account. When you make it a point to add money to your savings account each month, you will start becoming more practical in your thinking approach. As a consequence, it is highly possible that your entire behavior towards money itself might change. While earlier you would have had no qualms at spending thousands of dollars on drinks, you will now start thinking of putting that money into savings rather than waste it in drinks. And as far as you are concerned, that is obviously a positive shift.