What Happens After Bankruptcy?
Your Life after Bankruptcy – Important Things to Keep in Mind
The U.S. Bankruptcy Code offers consumers like you two empowering options to attain a fresh financial start – Chapter 7 bankruptcy works to discharge, or completely excuse, your credit card and other unsecured debts while Chapter 13 bankruptcy allows you to keep your home and car via a repayment of your secured debt over a three-to-five year period.
While filing bankruptcy may provide you with the empowerment you need to finally address your financial difficulties, you may also be wondering about what you can expect during your life after bankruptcy.
For example, you may not know that your bankruptcy will typically remain on your credit report for the next 10 years. Once aware of this important fact, you may be wondering how your bankruptcy filing will impact your ability to get credit, a mortgage or car loan.
After filing bankruptcy and finishing with your case, you may also wonder how you can avoid falling into the same traps that led you to file bankruptcy in the first place.
At Bankruptcy.Me, we will help you explore the issues most important to you after filing bankruptcy and we can also connect you with a local bankruptcy attorney who can provide you with even more information on life before, during and after bankruptcy.
Simply fill out the below free bankruptcy case review form or call 888-632-0587 and we’ll put you in contact with a local bankruptcy lawyer.
What You Can Expect after Filing Bankruptcy
A lot of people may be initially turned off by filing bankruptcy due to things they've heard through the grapevine about the negative stigma of bankruptcy, such as this myth that "you won't be able to get credit after filing bankruptcy for 10 years."
With that said, Bankruptcy.Me can help separate fact from fiction as you naturally wonder about what your life after bankruptcy may be like.
After your bankruptcy filing and discharge, you may realistically expect the following:
You Will Have Weak Credit
This can be expected after filing bankruptcy as you will now have to prove yourself to be a good credit risk. However, this may be nothing new for you; if you’ve filed bankruptcy, it’s likely that you had bad credit to begin with. Check out our section below about how you can rebuild your credit after bankruptcy.
You Will Be Flooded with Offers from Unscrupulous Lenders
While you’ll want to rebuild your credit after bankruptcy, you’ll need to be aware of unscrupulous lenders promising you how they can quickly rebuild your credit.
In fact, you’ll probably be bombarded with offers from such lenders that will actually push you near or at your credit limit (often through activation or membership fees) before you even do anything.
With this said, choose your credit with care by working with reputable lenders and not bypassing your sense of judgment for the sake of eagerness.
You Won’t Be Able to Qualify for Conventional Mortgages, Auto Loans & the Like
After filing bankruptcy, you will probably be a good 2-3 years from being able to get these loans. While this many seem far off, it’s a lot better than the myth of 10 years.
You May Have to Pay Higher Interest Rates on Your First Couple of Loans
Your interest rates will be subject to your three-digit credit score, which will likely be low after your bankruptcy filing. Keep in mind that your bankruptcy filing and other older items will have less weight on your credit score in time, and be sure to keep up with your most current payments as they will have more weight.
Your Life after Bankruptcy – How to Get Back on Track
If you’ve filed and completed bankruptcy, you should take a deep breath as you’ve been able to overcome your financial turmoil. After feeling this sense of relief, you’re probably wondering how to avoid those mistakes that caused you to rack up a lot of credit card debt or led to you almost losing your home or car.
Here are four integral steps to take after receiving your bankruptcy discharge:
CONTROL YOUR SPENDING
In order to be a financial success, you’ll need to spend less than you make.
Implementing and achieving this goal begins with you examining what you spend your money on and why you do so. A hard examination of your spending will probably reveal that you spend a lot of money on things that are unnecessary.
By recognizing and making changes to these spending habits, you can have more money to buy the things that you truly need and to also put your extra money away in savings.
LIVE WITHIN A BUDGET
After examining your spending, you need to create a budget.
In order to do so, you will need to take into account your expenses, your income, when you need to make payments, how many times you get paid each month, how much money is left over when your expenses are subtracted from your income, etc.
While it’s easy to figure out a budget, adhering to it is another thing.
Keep reminding yourself of why you need to be on budget (to break your old and bad spending habits) and keep a close watch on your spending.
You may find that you need to adjust your budget. Remember that your budget does not have to be set in stone; however, adhering to a budget is something that should be a continuous goal of yours.
START A SAVINGS PLAN
After reviewing your spending and creating a budget, you may determine ways in which you can start saving more money.
While this may not seem like a possibility if you are living on a budget, ask yourself if there are certain expenses that you can give up.
For example, do you really need to spend a certain amount on the lottery each month? Could you kick spending $8 for a pack of cigarettes every couple of days? In turn, you could use this money and put it into savings, where you will be paying yourself and be able to use this money if an important need ever arises.
REBUILD YOUR CREDIT
As mentioned above, your bankruptcy may remain on your credit report for up to 10 years.
While you may be thinking that it will be too hard to get credit after filing bankruptcy and that you don’t need to rebuild your credit, remember that you will want to show lenders that you are a good credit risk.
What may come as a surprise to you, there are post-bankruptcy friendly lenders out there who may be willing to help you after filing.
You'll have to show them that you have learned from your past mistakes with your credit and get to work on improving your credit rating. You can begin to do so by reviewing your credit report, making any changes to it that are necessary for its accuracy, and checking that you have not been a victim of identity theft.
Examine Your Possible Life after Bankruptcy with a Local Bankruptcy Lawyer
Whether you are planning to file for Chapter 7 or Chapter 13 bankruptcy, you will be interested to learn about what you can expect before, during and after your bankruptcy case.
At Bankruptcy.Me, we can put you in touch with a local bankruptcy lawyer who can help you examine your current financial situation as it may apply to Chapter 7 or 13, detail how the bankruptcy process works, and then dive into the things that you should be aware of when it comes to your life after bankruptcy.
All you have to do to help us help you is fill out our free bankruptcy case review form or call 888-632-0587 and we’ll help you get in touch with a local bankruptcy lawyer as soon as possible.