What Happens After Bankruptcy?
In a bad economy, bankruptcy is an unfortunate byproduct for many Americans. But what happens after bankruptcy? Many people are unsure of how their lifestyle and finances will be affected and for how long.
Filing for bankruptcy will have an adverse effect on your credit score and will remain on your credit report for up to 10 years. However, carefully rebuilding your damaged credit can produce results in as little as a few years.
After filing for bankruptcy, you may find your mailbox bulging with credit card and loan offers; however, read the fine print carefully. Many of these offers have an extremely high interest rate and hidden costs. Often, store or gas cards are the easiest to get, but use them wisely and pay them off every month.
Change Your Habits
Chances are you filed for bankruptcy because of bad judgment. Honestly assess your spending and saving habits, and make a plan not to fall into the same patterns again. Create a budget and savings plan, and stick to it.
Change Your Lifestyle
You will probably find that in order to stick to your budget, you may have to change your lifestyle. Although this may seem like a painful compromise at first, explore ways in which you can make small changes that add up to big savings. Eating at home more often instead of dining out or planning a vacation close to home are just a few examples of how to modify your lifestyle without feeling deprived.
Once your credit rating is on the rise, you'll begin to qualify for loans. In addition to getting loans for necessities such as housing or transportation, you can use small loans to rebuild your credit. Make sure you make all of your payments on time, and you'll see your score rise.