The majority of people dread bankruptcy because of two reasons. One, they think of it as a personal defeat and two, they think they’ll never be able to bounce back from it. Neither of these is true, especially the part about not financially recovering. In fact, turning to a Chapter 7 Bankruptcy Lawyer in San Diego is designed for that very reason, helping you get your finances in order and starting your life fresh, and that’s a fact. But there is a subtle art to it.
What should I do after I file for bankruptcy?
The first thing you should do after filing bankruptcy is sit back, relax, and smile. Congratulations, you’ve just taken the most important step in relieving yourself of the financial burden you’ve been struggling with for so long. Then, there are a couple of things you should think about for making the most out of your post-bankruptcy life.
Save the paperwork
Always remember to save the paperwork from your bankruptcy filing for the future, just in case. The truth is, you never know when someone’s going to ask to see some documentation regarding your bankruptcy filing.
This is especially important if you’re planning to apply for a loan, mortgage, or another form of financial assistance. Also, in case a debt collector or a lender gets in touch with you in the future, proper bankruptcy documentation is your best form of communication and defense. So keep your paperwork in one place.
Build a budget
Once you finish with your bankruptcy, you want a fresh start, and that means paying attention to your finances and not getting into trouble again shortly after filing. To prevent this from happening you need to establish a budget and adopt some simple financial habits that go a long way toward securing your independence in the long run. Here’s what you need to do:
- Save money: First and foremost, don’t spend it all, put some money on the side. One of the best methods of preventing yourself from spending your entire paycheck is to establish an automatic transfer to your savings account. This way, you’ll automatically allocate a set portion of your paycheck into another account without even knowing it. Aim for 10 percent, but go higher if at all possible.
- Budget: To make sure you’re focusing your spending on the most important items first, create a budget that comprises all of the daily living essentials you cannot go without. Also, ensure you’re allocating a portion of your earnings toward paying your bills.
Rebuild your credit
Once you place your finances on stable legs it’s time to start reestablishing your credit score. This is an essential post-bankruptcy step and here are a couple of things you can do to boost your credit:
- Take care of bills: First and foremost, be current on all your bills, without question. This is vital for boosting your credit score and making sure you’re doing your part in establishing better credit for the future.
- Open one secured credit card: One of the ways to secure a new line of credit after filing bankruptcy and remaining without any debts and loans is to open a secured credit card.
These cards have backing in the form of a savings account you’ve opened in your name. Funs on a savings account take the form of collateral and serve the purpose of establishing a limit on your new credit card.
From there, remaining current on your payments for this credit card further boost your score.
- Report utility payments: Another thing you can do is report your utility payments to have them count toward rebuilding your credit score. This goes for typical monthly expenses including phone, electricity, and utility bills.
Create an emergency fund
Having an emergency fund in place is another great way of ensuring you have a bright future even in the horrible case of you losing a job and steady source of income. With an emergency fund, you’ll have enough money for a certain period of time, allowing you to bounce back without racking up more unnecessary debt and placing yourself in a poor financial position again.
Which Chapter 7 bankruptcy lawyer can help me file my bankruptcy in San Diego?
Most people think bankruptcy is a defeat, but it’s actually one huge, gigantic win. So, as soon as you see yourself getting into financial trouble, it’s time to start thinking about which bankruptcy chapter would be most suitable for your particular situation. The entire point of bankruptcy is to help you recover your finances, eliminate as much debt as possible, and bring back a smile on your face that’s been lost due to all the debt you’ve been struggling with.
We foster the same philosophy at our legal firm, Bankruptcy Law Offices of Mark L. Miller. Our mission is helping individuals across San Diego breathe more easily once they eliminate the financial burden from their lives. We’ll be here every step of the way, supporting you until you come out stronger on the other side. If you’re looking to find out more about our process, give us a call and schedule a free consultation. You can find our offices near Whaley House.