How to Avoid Problems With Debt After Filing for Bankruptcy

 Posted on October 28, 2022 in Bankruptcy

If you are considering filing for bankruptcy, you are probably feeling overwhelmed and anxious about your financial future. It is important to understand that bankruptcy is a tool to give you a fresh start, not a punishment for anything that happened in the past. Depending on the type of bankruptcy you choose, you may be able to eliminate most or all of your debts relatively quickly by filing for Chapter 7, or you may consolidate your debts and repay some of what you owe over several years through a Chapter 13 repayment plan. After you have discharged your debts through bankruptcy, you will want to make sure you can maintain financial stability, and it is a good idea to take steps to avoid problems with debt in the future. With that in mind, here are some tips on how to avoid problems with debt after you have filed for bankruptcy:

1. Get Organized

By taking steps to organize your finances, you can make sure you will be able to stay on top of your income and expenses. By creating a budget and tracking your spending, you can understand how much money you are earning and the amount that you will need to allocate toward ongoing costs such as housing and food. By fully understanding where your money is going and how much will be left over each month, you can make any necessary adjustments to make sure you are living within your means and avoiding any new debts.

2. Start Saving Money

Once you have organized your finances and created a budget, you can make plans to determine how much you will be able to set aside and save for the future. This will allow you to make plans for major purchases that you may want to make, and it can also help you build up an emergency fund that can help you cover unexpected expenses without going into debt. It is a good idea to save at least three months’ worth of living expenses in your emergency fund so that you have a cushion to fall back on if you experience a financial setback.

3. Use Cash Instead of Credit Whenever Possible

After your bankruptcy, it is a good idea to use cash when making purchases rather than making charges on a credit card. This will help you avoid accumulating more debt. If you do use credit, make sure to pay off your balance in full each month, which will ensure that you will not need to pay high-interest charges. Using credit responsibly will help you rebuild your credit score and improve your financial standing over time.

4. Keep Tabs on Your Credit Score

After bankruptcy, it is important to regularly check your credit report and determine how you can improve your credit rating. This can help you ensure that the debts that were discharged during bankruptcy have been removed from your record, and you can also keep abreast of any new debts or other issues that could affect your credit score. If you discover any errors on your credit report, you can contact the credit bureaus and have the incorrect information removed. This will help you improve your credit score and qualify for new loans in the future when necessary.

5. Set New Financial Goals

Since bankruptcy can provide relief from debts, it represents an opportunity to move forward and pursue the life you want. You may consider setting a variety of goals for yourself, such as saving for retirement or major purchases, moving into a new home, or even starting a business. By setting specific, achievable goals and creating a plan to reach them, you can stay on track with your finances and avoid any future problems with debt.

Contact Our San Antonio Debt Relief Lawyer

Bankruptcy can offer you a fresh start, but it is important to take steps to protect yourself and avoid falling into debt again in the future. By following the tips above, you can take control of your finances and get on the path to financial freedom. If you have questions about the bankruptcy process, available debt relief options, or the steps you can take to address harassment from creditors, contact the Boerne bankruptcy attorney at the Law Offices of Chance M. McGhee. Call 210-342-3400 to set up your free consultation today.

Sources:

https://www.bankrate.com/personal-finance/debt/recover-from-bankruptcy/

https://www.investopedia.com/articles/pf/07/after-bankruptcy.asp