How to Pull Your Life Together Following Bankruptcy

After filing bankruptcy, it can be difficult to get your life back on track. Before bankruptcy, making your payments seemed impossible, and creditors were constantly calling you up to demand payments.

Now that the bankruptcy is finished, you may still be under stress. Many people experience feelings like shame, anxiety, guilt and hopelessness. While it might not feel like it now, it is possible to recover after bankruptcy.

Your bankruptcy does not have to be a financial disaster that ruins your life. If you take the right steps, you can rebuild your credit and start again. This process takes time, so be prepared for gradual changes.

However, bankruptcy has an impact on your credit score, but it will ultimately go away in 7 to 10 years. Despite a common misconception, lenders will still provide loans to people who have bankruptcy on their record.

You cannot file for bankruptcy again for another eight years, so your risk level has dropped significantly. If you can show a strong payment history and creditworthiness, you can still get a loan or credit card.

To get started, here are a few ways that you can begin recovering after your bankruptcy.

Look at the Cause of the Bankruptcy

Now that you have declared bankruptcy, you have a chance to learn from it. You can look at how your financial situation started to have problems originally.

Did you spend more than you owed? Was it due to medical debts? You have to figure out the problems that led to the bankruptcy so that you can prevent the same problems from from happening again. You cannot start a recovery plan unless you know where you went wrong and how you can change it.

Once you are aware of the problem, you can start to create a new strategy. If your bankruptcy was due to medical debt, there are steps you can take in the future before it gets out of control.

If the problem was overspending, then you need to create a new budget. You may also want to look for a job that pays better so that your financial situation starts to improve. If you are unsure about the right strategy, a credit counselor can help.

Focus on Your Credit Score

After bankruptcy, you may be afraid to even look at your credit score and fear it will never improve. While it might be hard, you need to be aware of what your credit score exactly is.

Your credit report will show if you have any outstanding debts or inaccuracies. If there is an error–you can dispute the inaccuracy and have it removed from your credit record.

If you want to repair your credit, you have to know the score you have now. Then, you have to start improving it one step at a time.

Decide on Your Goals

To ensure a successful recovery, you need to have a plan in place. Decide on the financial goals that you want to achieve. These can be things like: having a better credit score, staying out of debt, or getting a mortgage.

By setting goals, you will have something to focus on. You can decide on milestone steps that help you gradually work toward your goals.

Get a Secured Credit Card

A lender will probably be unwilling to give you an unsecured credit card after a bankruptcy, with fear you won’t make your payments properly. To rebuild your credit, you need to show a strong payment history.

A secured credit card is an easy way to boost your credit score. You basically give the lender a deposit–this cash deposit is generally the limit on your credit card. Secured cards tend to have higher interest rates and fees, so make sure you’re getting the best deal you can.

Bankruptcy filers are often targeted by predatory lenders, so make sure that you do not unintentionally become a target.

Consider Opening a New Bank Account

One way to demonstrate financial stability is by getting a new bank account. You should also set up a savings account so that you can easily put aside some of your income–you can even open one online.

To make your bills easier to pay, talk to your banker about automatic bill payment options online. If you want your credit score to improve, you have to show a track record of paying your bills on time. When you set up automatic bill payments, it your bill payment process a whole lot easier.

Learn From Your Mistakes

While recovering from a bankruptcy might not be easy, it is possible. This process takes time, so you have to be motivated, and willing to learn new techniques.

You should be checking your credit reports frequently and developing a consistent payment history–your main goal should be avoiding the same problems again. With patience and effort, you can get your financial situation to a good place.


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