How You Can Bounce Back From Bankruptcy

May 7th 2016

Monitor Credit Reports

After filing bankruptcy, many people assume that their debt is automatically discharged. However, this is not always the case. It is important to monitor credit and obtain copies of credit reports from all three credit reporting agencies on a regular basis. Individuals who have filed bankruptcy should review the credit reports and detail any discrepancies by submitting an explanatory statement to each credit reporting agency. This statement needs to outline the inaccuracies of the report and request that the agency remove the erroneous information.

Create a Budget

One important step in improving credit and financial status is to track spending and realistically detail how income is divided. Individuals who have filed bankruptcy should commit to budgeting and allocating ample funds for monthly expenses to ensure bills can be paid on time. It is helpful to compile a conservative budget that slightly underestimates earnings and allocates as much money as possible to outstanding debt so that loans can be paid off in a timely manner. A personal budget can also help people see areas of wasteful spending that can be eliminated to free up funds for debt and financial responsibilities.

Pay Bills on Time

People file bankruptcy for a variety of reasons, and many fall into financial distress for reasons out of their control. A clear effort to rebuild credit requires on-time payments after a bankruptcy. A personal budget can help individuals stay on track, but it may be necessary to take on an extra job to ensure bills can be paid on time and in full so that credit is not affected.

Open a Secured Credit Card

Credit card debt is not a path to financial security, but opening a secured account can help people who have filed bankruptcy rebuild their credit. Individuals should choose a credit card that allows them to place money on the card and spend it wisely while working to gain positive credit reporting. A credit card should not be abused or maxed out, as high balances and late payments can adversely affect credit reports.


People who file bankruptcy receive a financial fresh start, but that fresh start is frequently accompanied by challenges. Credit is often difficult to obtain after bankruptcy, and many individuals find themselves facing higher interest rates from lenders. However, these challenges can be overcome with strategies to rebuild credit and secure a fruitful financial future.

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