Rebuilding Your Life after Bankruptcy

Thousands of people will file for bankruptcy in Los Angeles each year, and many of them will go on to live happy, successful lives. Some of them, however, won’t learn from old patterns, and may need to file bankruptcy again in the future. What your life looks like after filing bankruptcy is largely up to you, and you’ll be glad to know that only a few simple steps can keep you on a good financial path. Many people are afraid of what will happen after their debts are discharged, but the truth is, the downsides of bankruptcy aren’t nearly as bad as you may believe. If you have worked with a qualified bankruptcy attorney and you know that filing is a smart decision for you, then it’s merely a matter of rearranging some spending and saving habits for the future.

While your bankruptcy filing will stay on public record for several years, that doesn’t mean that your credit will automatically be terrible, or that you won’t be able to rebuild your finances. Some people see very little change in their credit score, while others see a temporary dip. As far as your credit score and credit report go, here are a few things to keep in mind after your bankruptcy is discharged:

  • Regularly check your credit report and make sure your debts were discharged properly. Also, keep an eye on your other debts, your personal info/history, and anything added or altered in your report.
  • Don’t sweat your credit score too much. Simply keep an eye on it, and if you’re managing your finances well, you should see it slowly increase over time.

The real financial recovery comes down to your personal habits. Even if you have not yet filed bankruptcy, it’s never too early to start practicing smart money management:

  • Learn how to work within a budget and live below your means.
  • Try to set aside an emergency fund or savings account, so you can avoid using credit cards when unexpected things happen.
  • Reevaluate your monthly bills, and consider downsizing, cutting out frivolous items, or finding a second source of income.

Once you have your own financial habits in check, you can rest easy knowing that you can take care of yourself and avoid another bankruptcy in the future. Depending on your profile, you may be able to obtain credit again a year or so after your filing. However, be cautious when opening new accounts, and make sure that you will be able to responsibly manage this new credit.

Want to learn more about consumer bankruptcy in Los Angeles? Reach out to us at Martin & Bontrager today and ask for your free consultation.