Tips on Surviving a Bankruptcy

Getting out of bankruptcy isn’t easy and it’s not a quick fix. You must rebuild your credit rating and prove you can make payments on time. 

Financial difficulties stemming from life events are the leading causes of bankruptcy filings. Having a savings plan in place can help you survive these difficult times. 

1. Create a Budget 

Creating a budget and sticking to it is a critical step for anyone recovering from bankruptcy. It’s also a good idea to set financial goals and make them known, such as saving for a home or a car. 

Keeping an emergency fund in place is important as well. This will help you avoid turning to debt in the future. 

When you’re building an emergency fund, consider moving your money into a savings account with high interest rates. Also, consider working a second job or getting a side gig to generate additional income. 

It’s also important to stay on top of bills that are not included in your bankruptcy filing, like utility, cellphone and medical payments. If they’re not paid on time, they could go to collections, which will appear on your credit report and ding your score. 

2. Find a Job 

A steady source of income is a top priority after bankruptcy. Unexpected expenses like divorce costs, mountainous medical bills and other life events can be financial catastrophes if you don’t have an emergency fund or adequate savings. 

It’s important to understand that your bankruptcy won’t prevent you from getting a job. Government agencies are prohibited by law from using your credit history as a reason to deny you employment. However, private employers are allowed to run a credit report as part of their hiring process and may find out about your bankruptcy. 

You can help your chances of finding a job by offering references and demonstrating that you’ve improved your credit since filing. Also, try to work in an industry where creditors can’t garnish your wages. 

3. Find a Place to Live 

One of the biggest challenges after filing for bankruptcy is finding a place to live. Having stable employment and a solid residential history is essential for getting back on your feet after bankruptcy, especially as many employers and landlords check credit references. 

Saving money is a must after bankruptcy, particularly for large purchases like vehicles, vacations, and home renovations. If you find yourself struggling to save enough, consider working a side hustle or getting an additional job to bring in more income.

Aside from the monetary cost of filing for bankruptcy, it also takes a toll on your life and relationships with family and friends. This can make it difficult to maintain a positive mindset and stick with your budget. If you struggle to do this on your own, consider seeking out a financial coach for help. 

4. Get a Credit Card 

After filing for bankruptcy, a credit card can help you rebuild your credit history. It can also demonstrate to lenders that you are responsible with credit and may repay their loans. 

However, it’s important to only use a credit card for necessities (toilet paper, non perishable food) and pay the balance in full each month. If you are unable to qualify for a regular credit card after bankruptcy, consider applying for a secured credit card which allows you to create a credit line based on the amount of money you deposit upfront. 

Making on-time payments is the most important factor in determining your credit score, so avoiding late fees and keeping your credit utilization low is vital. Using tools like credit card issuers’ email or text reminders, sticky notes, a calendar, and anything else that will keep you on track can be helpful. 

5. Keep Up with Bills 

Credit cards are one of the most popular ways to get into debt. However, if you pay them off in a timely manner, you can avoid the risk of going into bankruptcy. 

It’s important to keep up with your bills during and after bankruptcy. If you don’t, the official receiver may take action to evict you. It’s also important to make sure your rent is up-to-date as some landlords will refuse to let people with a bankruptcy history live in their apartments. Keeping up with your bills isn’t easy, but it’s crucial for staying financially stable. If you’re struggling to keep up with your payments, try cutting back on non essential expenses. This will free up money in your budget to pay down your debt faster. A Harrisburg bankruptcy attorney can assist you with filing for bankruptcy to ensure it is done correctly.