There are few things as difficult as making the decision to file for bankruptcy. When financial obligations start to overwhelm you and trying to pay your monthly minimums feels nearly impossible, filing bankruptcy is usually a good option. You need to realize that filing for bankruptcy won’t affect your ability to get lines of credit and loans forever.
The main thing you need to focus on after filing for bankruptcy is getting your finances on track. Nearly 16% of annual bankruptcy cases are repeat filers. Rather than becoming a repeat bankruptcy filer, you need to work on making smart financial decisions. Here are some things you can do to bounce back after bankruptcy.
Apply For a Secured Credit Card
Overwhelming credit card debt usually leads to bankruptcy. After you get out from under the weight of your credit card debt, you will probably be soured on the concept of using this form of credit. If you want to improve your credit score and payment history, then consider applying for a secured credit card. This type of credit card usually requires an applicant to submit a security deposit.
This security deposit will act as your line of credit on the card in question. By using this card and making on-time payments, you can start to improve your credit score. Before you choose a secured credit card to apply for, do some research. Ideally, you want to find a card that has a relatively low-interest rate. You also need to look at the reputation of the company providing the secured credit card.
Use Automatic Payments
Did you realize that on-time payments account for nearly 35% of your FICO score? Missing even one payment can put your credit score in freefall. Rather than making your credit score worse due to a missed payment, you need to put safeguards in place to avoid this problem. The best way to ensure your creditors are paid on time is by using automatic payments.
Most companies provide autopay options to their customers. By entering your bank account information, you can set up automatic payments with creditors. As these on-time payments are made, you will see your credit score start to improve.
Eliminate Bad Money Habits
Taking stock of the mistakes that led to you filing for bankruptcy is important. Identifying the bad money habits that failed you before can help you avoid them in the future. Setting financial goals and establishing a budget can help you get back on track after bankruptcy. Meeting with an established financial advisor can help you create a comprehensive budget.
By keeping track of your money, you can identify wasteful spending and grow your savings account over time. Focusing on maintaining good financial habits will help you get back on track after filing for bankruptcy.
If you feel like bankruptcy is the best way to get out of the financial hardship you are currently in, then it is time to seek out the help of the Moshier Law Office, PLLC.