Arguably, bankruptcy is one of the toughest financial situations you may face in your lifetime. Your overwhelming amount of consumer debt has put you in this situation now. Is there ever a relief from this situation? In fact, there is. Let’s break it down and see what actions you can take to recover from bankruptcy.
You may be able to avoid bankruptcy by working with a nonprofit credit counseling agency.
What Should to Recover from Bankruptcy?
Understanding what really got you into bankruptcy is the first step to recover from bankruptcy. Was it something that was out of your control, such as job loss or a health condition? Or was it the poor effort of debt management?
Another important part to bounce back from bankruptcy is rebuilding credit. Therefore making timely payments on your bills and showing your creditors that you are responsibly managing your credit is crucial.
Thirdly, avoid the urge to grab all the credit card offers that you receive in the mail. Building up debt is the worst mistake when you are trying to bounce back from bankruptcy. Cash-only purchases can discipline your spending. Other ways are to take control of your budget and trying as much as possible to stick with it! Bring in saving to the equation, even if it is only a minimal amount. This can get you in the habit of saving and potentially help you reach your saving goals.
In addition to the general must-do’s here is a step-by-step guide on how to bounce back from Bankruptcy:
- Create a budget. “A monthly budget is a must for any household. Budgets help avoid overspending and keep track of where your money is going,” says Ross.
- Set SMART goals. “That means “Specific, Measurable, Achievable, Realistic and Timely goals,” she adds. “Setting goals will help you make financial achievements.
- Rebuild credit. “Pay all your bills on time and pay more than the minimum on your bills,” Ross notes.
- Start an emergency fund. “To avoid being financially unprepared for whatever life throws at you, start an emergency fund to cover at least three-to-six (and ideally six-to-nine) months’ worth of expenses in case of the unexpected,” she adds.
- Seek financial literacy education or talk to a financial planner who can help you avoid falling back into unhealthy money habits, Ross says.
- Focus and finish. Above all, don’t act on your wants, but needs instead.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.
