Whether you’ve just filed a Chapter 7 or “simple bankruptcy” or recently completed your Chapter 13 bankruptcy, which is a debt repayment plan, there are a number of vitally important things that you should do once your case has been finalized in order to start getting your financial house back in order. We’ve outlined them below. Enjoy.
Step 1: Put all of your paperwork together in a safe place for long-term storage. Right now you’re probably thinking that it will be a long time until you get credit again but, the day that you do, most lenders will want to see a copy of your bankruptcy papers. Yes, the information will most likely appear on your credit report, but some lenders still like to see them. Also, should one of your creditors try to collect on an old debt in the future, it will be good to have your paperwork handy to get rid of them.
Step 2: Make sure to check on your Credit Reports on a regular basis. All three of the “Big 3” credit reporting agencies must, by law, send you a credit report once a year. It’s probably a good idea to wait at least six months before you ask for them, and it might take even longer before some of your creditors rectify the accounts they have with you, but you definitely shouldn’t put this off for too long.
The reason is simply that you want to make sure that all of your debt has been discharged correctly and also, more importantly, correctly reported to the credit bureaus. You certainly don’t want any discharged debts to be counted against you on your credit report or, even worse, transferred to a new collection agency might think that they can come after you for those debts.
Step 3: Create a Budget, stick to it and review it regularly. While many consumers are under the false impression that people who file for bankruptcy are irresponsible, the fact is that the vast majority of bankruptcies are actually caused by either job loss, medical expenses, divorce or other major, life impacting circumstances. Start tracking every dime spent on credit and every charge out of your checking account.
Point being, you don’t want to dig yourself into a financial hole over again once you’ve filed for bankruptcy and, since having good credit is definitely a part of modern life, creating a budget and sticking to it will allow you to (eventually) build up your credit again and get back to having an excellent credit score that saves you money on things like credit card interest, mortgages and automobile loans.
Step 4: Fund an Emergency Account. One of the best reasons to make a budget is to see where you’re overspending and, once you do, start putting that extra money towards an emergency fund. Even better, once your emergency fund grows large enough, you can start putting some of that money into investing, retirement or college tuition for your children.
Step 5: Start thinking about getting new credit. Let’s be honest, you already know full well that debt can be overwhelming. As important as credit may be, there’s a big difference between having good credit and having a huge debt load that eats up all of your extra money and then some. Once it’s time to start thinking about new credit, do it wisely and with a lot of caution.
Bankruptcy, if done correctly, gives you a chance to start over with a fresh slate. Do yourself a favor and take a full advantage of that slate so that you never have to worry about going through bankruptcy again.