How To Thrive Financially After Bankruptcy

March 3rd, 2010 by Reed Allmand

Bankruptcy offers an opportunity at a fresh financial start of even the most indebted individuals.  But how does a debtor ensure that their financial affairs remain in the “black” after a bankruptcy?  Here are a few tips:

1. Create A Budget – Whether you filed a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, creating and sticking to a realistic budget will help you manage your financial affairs properly.  Your budget doesn’t need to be complex; but it should keep track of your income and expenses and allow you to plan how you’re going to spend your money before it arrives.
2. Spend Lightly – After bankruptcy it is very important to practice financial discipline and live within your means.  The first step to becoming indebted is spending money that you simply don’t have. Don’t allow yourself to fall into that trap.
3. Buy An Affordable Home – One of the biggest mistakes many debtors made is buying a home they could not afford.  Do yourself a favor after bankruptcy, only purchase a home that you can easily afford and avoid predatory lenders.  Don’t worry, after building your credit record up after bankruptcy you should be able to get a prime mortgage within a couple of years.
4. Pay Your Bills And Pay Them On Time – After your bankruptcy make sure you pay bills in a timely manner to avoid unnecessary late fees and penalties.  Those fees can quickly add up and become unmanageable, not to mention the damage late payments can do to your credit record.   If you are for some reason unable to pay a creditor, negotiate with them quickly to work out a temporary repayment plan or forbearance.