After Bankruptcy

After Bankruptcy

After you are discharged with a bankruptcy, you’ll have to spend time rebuilding your credit and setting up a plan to handle your finances.

Handling Your Finances

Budgeting has three main goals, which include:

  • ensuring you are not spending more than you earn
  • ensuring you will have the money available when a bill is due
  • developing a savings plan

You should have a checking account. If you do not, shop around for a bank with the lowest minimum balance for free checking or the lowest checking charges. There are dozens of different checking account arrangements, so compare.

Ideally, experts say, you should save approximately 10% of each paycheck. For many people, this seems impossible, but that is no excuse for not trying to save something. If you have never saved, try it for awhile. You may be surprised to find out that the feeling you get from looking at a bank account balance with an emergency cushion is as good as the feeling you would get from spending that money.

Obtaining Credit

One of the problems of going through a bankruptcy is that it will be difficult to obtain credit. During the bankruptcy you found out what life is like without the use of credit, and it is a good idea to do without credit until you are sure that you can keep your finances under control. However, in our society, credit is almost essential.

Buying a home is frequently a better deal than renting one. Also, some essential items, such as cars, are very difficult to pay for in cash. It is a good idea to begin establishing some credit once you have things (including your spending habits) under control.

  • Introduction to Bankruptcy
    Do you need a fresh financial start? Are you being hounded by debt collectors? You are not alone. Almost 1.5 million individuals file personal bankruptcies every year in the U.S. It has been a long-standing element of American law that an individual can file for bankruptcy and obtain a fresh start...
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  • Types of Bankruptcy
    For individuals, there are two basic types of bankruptcies : chapter 7 and chapter 13. An individual may file for bankruptcy under Chapter 7, which is sometimes called "fresh start" or a "liquidation" bankruptcy. In a Chapter 7 bankruptcy, an individual may keep certain kinds of property (called "...
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  • Who Can File?
    Generally, anyone can file for bankruptcy. However, not everyone qualifies to file for a particular kind of bankruptcy. If you are an honest person who can't afford to pay your bills, you can qualify for bankruptcy. If you have previously filed for bankruptcy, it may affect your options. For...
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  • The Process
    There are eight common elements in obtaining a bankruptcy discharge (i.e., eliminating or reducing your debts, or planning their repayment), although the details of these may vary depending on your situation. The attorney you find through LegalZoom will help you with the entire process which takes...
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  • Pre-Bankruptcy Credit Counseling
    Before you can file for bankruptcy, you must first consult a nonprofit credit counseling agency approved by the United States Trustee's Office. This consultation may show you if there are alternatives bankruptcy that would work for you.
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  • Bankruptcy Reform
    Congress changed the bankruptcy laws significantly in 2005, making it more difficult for individuals to file for bankruptcy. However, bankruptcy relief remains available to those who qualify. Some important elements to the revised bankruptcy laws are:
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