Most people who have filed for bankruptcy experience an enormous sense of relief and hope once they realize they are no longer personally responsible for their mounting debts. With this relief, however, may come uncertainty about the future. You now have a clean slate to move forward, or do you? Anyone examining your credit report will undoubtedly notice your bankruptcy filing. By handling your finances and purchases appropriately, you can not only rebuild your life but rebuild your credit as well. Here’s what to know after filing chapter 7 and what to expect in life after bankruptcy.
Budgeting is Crucial after Chapter 7 Bankruptcy
Post-bankruptcy, you will need to create and stick to a well-planned budget in order to stay on track financially. For those that file for bankruptcy, the old adage about not having a plan being a plan to fail is usually true. Creating a budget allows you to closely monitor your income and your expenses, your bank accounts, and track where your money is going. When budgeting, you may also be able to find places to reduce your costs, such as changing or canceling your cable television subscription, using coupons when grocery shopping, buying generic products or canceling other recurring services you no longer use or need.
Pay Yourself: Save Money
Along with your budget, you will also want to open a savings account after your bankruptcy discharge if you do not already have one. Then, start paying yourself first and put money away. Having an emergency fund could help you avoid the need to file another bankruptcy in the future. With money in a savings account, most people are less likely to rely on credit when they want to splurge or when unexpected or emergency expenses arise.
For many bankruptcy filers, impulse buys are what get them into trouble. Creating and adhering to a budget and relying on money you already have instead of credit that can put you off track is the best way to move forward.
Consider a Secured Credit Card
Although they may have higher interest rates and require an up-front payment, a secured credit card is one way to improve your credit rating. With this type of credit card, you give the credit card issuers a deposit, and the amount of your deposit determines your credit limit. You then use your secured card like a regular credit card, and the credit card company reports your activity to all major credit bureaus. By utilizing a line of credit and paying it off each month and paying by the due date, you can positively impact your credit scoring. Responsible use of this card can show future potential creditors that you have changed your behaviors and can be trusted with credit again.
Other Ways to Improve Credit
You may want to improve your credit in other ways, such as taking out a small loan with a reliable and credit-worthy co-signer. Your payments will be reported to the credit bureaus just like your secured credit card and can help to gradually improve your score. Paying more than what is required of you can also help.
If you have any other loans, such as a car payment that you have reaffirmed or obtained after your bankruptcy discharge, be sure to keep paying them as stated in your contract. Your on-time payments will not impact your credit score if the credit was obtained prior to your bankruptcy filing, however, it will increase your chances of keeping the car or other secured property.
Will Creditors Still Call?
After filing for Chapter 7 bankruptcy, you may still get a few calls from creditors asking you to pay a debt. Although you do not have to, you can provide them with your bankruptcy case number and your Atlanta bankruptcy lawyer’s information. Bankruptcy is a public record, and if they make an effort, creditors can find the information about your bankruptcy filing. Telling you that they never received notice of your filing is no excuse for trying to get you to pay a debt you are no longer legally responsible for. If they continue to call or otherwise contact you, discuss the situation with your bankruptcy attorney in Atlanta. The debt collector could be in violation of the Fair Debt Collection Practices Act (FDCPA).
Schedule a Free Consultation with an Experienced Atlanta Bankruptcy Attorney
If you are struggling financially, there is help available to you at the Cornwell Law Firm. If you have questions about what happens after you file for Chapter 7, bankruptcy generally, or if doing so is right for your situation, we are here to help.
Call our office today at 404-476-8644 to schedule your Chapter 7 bankruptcy consultation or fill out our online contact form.