Having to file for bankruptcy is not an easy process on the mind or on the reputation. It almost feels like you have failed as a person. However, there is life after bankruptcy, and you can pick up the pieces. This short guide will list some ways to recover from bankruptcy and show you how a fee-only financial planner can help.
Start by planning
Planning is the first you need to do after filing for bankruptcy. You need to know what to do next and what you’ll need to do in the future. An NY fee-only financial planner would advise you to gather the documents from the filing and have them handy in case you get calls from debt collectors.
Some of the paperwork you should focus on keeping includes the bankruptcy discharge, petitions associated with the bankruptcy filing, and court correspondences. If you need help, you can contact an NY fee-only financial planner.
Create a fresh budget
Budgeting is also part of planning, but it is more specific. You need to budget every single thing you spend, from your meals, to rent and transportation expenses. Make sure you’re not spending more than you’re earning. Remember, the entire point is to recover from bankruptcy. Overspending will lead you back to where you came from.
So while budgeting, ensure that you make provision for your needs and savings each month. Saving at least 20 percent is a good start. With time, you may be able to increase this percentage with proper planning.
Fix your credit score
Fixing your credit score is not easy, especially if you have filed for bankruptcy. However, small steps can take you where you need to be. For one, ensure that all your bills are paid on time. Don’t be late on any payments, even utility payments.
As you meet payments, creditors will begin to trust you once more.
Try to grow at your job
Being in a stable job is evidence that you are trustworthy. Job hopping can be bad for your credit score. So try to develop yourself in your position and grow there. When you eventually leave, you should be aiming for a higher position with more certifications and skills.
The idea behind a stable job is the stable salary it provides. It shows the lenders that you can meet up with payments regardless of your previous bankruptcy issues.
Save for a rainy day
Rainy day funds can get you out of a difficult situation in the future so make sure you have it sorted. You can opt for a regular savings account or a high yield savings account. Both offer interest but may have different terms. So go over each term and pick one that works for you.
If you want other options, speaking to a financial planner could help.
Set financial goals
When you’ve saved up enough, it is time to set financial goals for yourself. It is advisable to set both long and short-term goals and outline how you hope to reach them. Remember, you don’t need to reach the peak before you consider your goals met. Being able to come this far alone is an achievement. Still, you can push yourself to do more so you don’t come back to your previous situation.
