6 ways to bounce back from bankruptcy
1. Make a budget. Track your expenses for four months to get an idea of how much you’re spending. Then create a realistic budget that fits within your monthly income. The first step to saving is to set boundaries on your spending.
2. Learn to love cash. But don’t fear credit. You must re-establish credit after bankruptcy unless you plan to buy everything in cash — including a house or cars. Even future landlords or employers will want to see that you have rebuild credit after bankruptcy. Love cash, but learn to manage and respect credit.
3. Pay all your bills on time. Also important: your bank. If you are bouncing checks, have overdrafts or are incurring bank fees that will show up (on your credit report).
4. Watch your credit report. You’ve been through a bankruptcy to get a clean slate, and you need to make sure this is accurately reflected in your credit reports. You also want to take control of your finances and start making some smart moves, which means monitoring your report regularly for errors.
5. Re-establish credit through a line of credit. Your bank may offer a personal line of credit that can be secured by a savings account. This is known as a secured loan. While this may help you re-establish your credit, the interest you pay on the line of credit will far outweigh the interest you earn on the savings.
6. Steer clear of scams. Beware of anyone promising to “fix” your credit after a bankruptcy. Re-establishing your credit is hard work,but it’s something you can do yourself. There is no way to repair it overnight, and there are a lot of scamsters who will offer to for a fee. Be very careful.Check with the credit bureau or state regulatory agency.