Filing for bankruptcy can be scary. However, it can actually be a good way to get back on your feet and start moving in the right direction. Although filing for bankruptcy will negatively affect your credit score temporarily, that doesn't mean there isn't anything you can do about it.
Contrary to popular belief, filing for bankruptcy doesn't mean you can never get credit again. Follow these four steps to repair your credit after you file for bankruptcy.
1. Check your credit score.
As much as you may not want to look at the number, it's important to check your credit score and know where you stand. It's also important to check for any mistakes that may be making your credit lower than it should be.
2. Carefully track your spending and make a budget.
Sit down and look at where your money goes each month. There are a lot of free apps and websites that can help you do this. Once you've analyzed your spending, make a budget and stick to it. Make sure you have enough money to pay for necessities and to pay any outstanding loans in full each month.
3. Pay your bills on time and in full.
If you have any loans left after filing for bankruptcy, make sure you continue to pay them in full and on time. Not only are you avoiding paying higher interest rates, but you are also showing creditors that you are no longer a risk.
4. Don't swear off of credit.
In order to build your credit back up, you need to continue to use credit and show that you are responsible. It may seem scary to open up a credit card again, especially if that's what got you in trouble in the first place, but getting a secured credit card is a great way to control your spending while also building your credit. Use your credit card, but don't spend more than you can afford so you can pay the bill off in full each month.
Just remember: bankruptcy is your chance at a fresh start. If you're struggling under the weight of credit card debt, medical debt or other burdensome debts, talk with a bankruptcy attorney today to discuss your options for gaining financial freedom again.