For many people facing serious financial challenges, the thought of bankruptcy is bleak: They think they will never again be able to obtain credit, they will never get into a decent home or have any kind of normal life.
It is true that you will have to liquidate some of your assets and it will be difficult to obtain credit for some time, but that is not the end of the story. Many people who have received bankruptcy relief have gone on to rebuild their credit scores and live relatively normal life without having to live in squalor or remain without credit.
The Bankruptcy Proceedings
During the bankruptcy, you will be liquidating your assets. While you will likely be able to keep many of your personal belongings, a great deal will be turned over to the bankruptcy trustee.
Once you have filed for bankruptcy, you will have difficulty obtaining any kind of loan or credit for some time, maybe a couple of years.
But you will be able to rebuild.
After the Bankruptcy Proceedings are Over
After you have received bankruptcy relief, you can start to rebuild your credit and your life. Here are a few essential tips for rebuilding your life after bankruptcy:
- Income: First, it is critical that you find some legal means of obtaining income. Having a job and securing it for some time will be the most important thing you can do to start looking like a viable candidate to creditors.
- Credit: As soon as you are able, secure a line of credit. Make it small and make sure the interest rate is as low as possible, as high interest with frequent compounding is a sure way to land back under crushing debt. And make sure you pay your credit bills on time.
- Bills: In addition to your credit bills, you need to make sure to pay all your bills on time. When rent, utilities and other regular payments are arriving late, you will have a stain on your already beleaguered credit report. You want to avoid this at all costs.
- Savings: It is also helpful to start a savings account. Put a little into it every month and be careful not to empty it unless you have no other choice.
With these simple steps, you will be well on your way to rebuilding your credit after bankruptcy. Although it might take some time, it is important to remember that you can have a life after bankruptcy.