While the prospect of restoring your credit and financial stability can feel overwhelming after a bankruptcy, it hardly compares to the negative emotions experienced before filing for one. That's why, if you've survived a recent bankruptcy, you probably feel a sense of freedom with the chance to make a fresh start. However, you may also be concerned that your filing could impact your future credit score and prevent you from achieving your long-term financial goals. Ideally, your bankruptcy attorney helped you with this.
Move Forward Emotionally
There are a lot of emotions that go into filing for bankruptcy. It’s important to realize that bankruptcy is not the end of the world. In fact, it’s a way to move forward without the stress of creditors breathing down your back. Here are some tips for how to move forward.
Stop the Guilt Trip
It’s not uncommon for people to feel feelings of disappointment and failure when they declare bankruptcy. These are tough economic times. In 2010, U.S. personal bankruptcy filings rose by 9 percent. That translates to 1.53 million bankruptcy filings. According to a 2011 survey by FindLaw.com, one in eight adult Americans (13 percent of the population), consider filing for bankruptcy. You are not alone, so stop feeling guilty, or as if you have failed.
Stay Positive
Focusing on what you have – the ability to move forward can help you remain positive. In addition to this, surround yourself with positive people.
Pay Your Bills!
Chances are you’ve learned from your past wrong-turns when it comes to money. Now that you have a clean slate, you have the opportunity to remain diligent about your finances. That means paying bills on time, creating a budget, and monitoring spending. It might be a good decision to work with a financial advisor to get some tips on how to better manage your cash flow.
Use a Secured Credit Card
Bankruptcy can mean a hard hit to your credit. A secured credit card allows you to deposit an amount of money into a bank account, which acts as your credit limit, thus allowing you to pay down debts quickly and also rebuild your credit as you do it.
Moving Forward After Bankruptcy
One of the biggest hesitations with filing for bankruptcy is the amount of time it takes to restore your life and your credit.
According to the Fair Credit Reporting Act, a bankruptcy will remain on a debtor’s credit for up to ten years after your filing date. A Chapter 13 bankruptcy is typically removed from a debtor’s credit report after seven years. Remember that these timelines are from the day you file your case, not the day it is discharged, which helps you get through it a little faster. Because most Chapter 13 bankruptcies last three to five years because of the repayment schedule, chances are a Chapter 13 will only appear on a credit report for another two to four years after completing it.