Hard economic times have left many Americans facing the devastation of bankruptcy. While it can be an emotionally grueling time, it is important to remember that there is life afterwards! Here is what you need to know to recover quickly.
You cant watch the news without realizing that millions of Americans are struggling to pay their bills. Delinquencies and foreclosures are on the rise and many have no where to turn to for help.
The only alternative for some may be bankruptcy.
The economic and emotional harm brought on by bankruptcy is something few can understand. While it seems like it is the end of the road, it is important to remember that it is really a new beginning. And this time you want to do it right!
Here are some steps you can take to regain your life faster than you ever dreamed!
Please listen to this first step, because it is by far the most important: Do NOT let the bankruptcy define you!
Stop beating yourself up! Its ok to vow that you will never go through anything like that again, but let it go. Realize that that was a specific period of your life and not who you are. The past is no reflection of your future. Its time for you to move on.
Now is a great time to develop multiple streams of income.
You family is going to be more secure if you have income coming from several sources, even if your job is very stable. This is a great time to invest in you and learn a new skill! Why not start a website based on a hobby or a home-based business?
Regaining your financial life is another key area of importance. One of the first things you will need to do is open a bank account. (Assuming you do not currently have one.) You might try visiting a credit union or grocery store bank and establishing a relationship with the branch manager. Explain what happened and find out what you will need to do to get another account. It may not happen overnight, but if you do what is necessary, you should be able to open an account fairly quickly.
Next, you will want to reestablish your credit. This step might seem counterintuitive. After all, wasnt it too much credit that got you into this mess in the first place?
Unfortunately, you have to use credit to get or improve your credit score. And having a low or no credit score is very expensive.
But you have terrible credit! Who is going to give you credit right after a bankruptcy? Fortunately, there are a couple of options.
One of the best things you can do is go to your bank and see if they will let you buy a CD and then take out a loan against it. Because they will be completely secured, the bank is more likely to grant this loan. Even though you essentially end up paying interest on your own money, in the long run you win because you have established a new payment history.
The second way to reestablish credit is through secured credit cards. You will likely begin getting offers for these shortly after your bankruptcy has been discharged! A secured credit card works much the same way as the CD loan does. You will give the lender a set amount upfront and they will issue you a credit line of that amount or perhaps slightly more.
You want to be an educated consumer when you look for a new credit card company. While your first instinct may be just to go with whoever will approve you, you should shop around and find the best card for you! Key features to look for include a low annual fee and no application fee! It is also great if you can find a card that will convert to unsecured after a specific number of on time payments.
Now that youve reestablished your credit, make sure you manage it wisely! Make all of your payments on time as lenders are likely to be less forgiving of minor slips ups than they would have been before the bankruptcy.
Monitoring your credit regularly is very important.
Make sure that lenders arent reporting accounts that were included in your bankruptcy as open and past due. This happens more often than it should, especially when lenders have sold your account to collection agencies.
One of the easiest solutions it to keep a letter on hand to send to any lender that contacts you. Include your personal information, the bankruptcy case number and your attorneys contact number. If you have this on hand, it will be easy to respond to any lenders who are still trying to collect from you.
By following these steps, you can bounce back from bankruptcy in no time! In several years, you will even be able to own a home again!