Declaring bankruptcy may seem like an “end” of sorts, but for most people who file, it is actually more like a new beginning. Although bankruptcy is an opportunity for those looking to rebuild their financial life, it can also be quite daunting. A strong plan, financial awareness and good habits can help individuals who have filed for bankruptcy in California move forward in a positive direction.
Best practices include:
- Get organized: Having the paperwork from one’s bankruptcy discharge organized and filed is often the first step to rebuilding one’s financial future. This paperwork may be requested in the future when looking for a mortgage or other loan. It is also critical to have on hand if a debt collector reaches out.
- Budget: Having a budget that includes money set aside for an emergency fund is a best practice for almost anyone. However, those recovering from a bankruptcy will find this particularly critical. There are many ways to budget, including using software or an app, or following a methodology such as the 50/30/20 rule. However one chooses to budget, taking this basic but significant step is key to a healthy financial future.
- Keep an eye on credit reports and ratings: Rebuilding credit is one of the most important aspects of recovering from a bankruptcy. The best way to start doing this is to order a credit report and ensure the bankruptcy is included on the report. Then, take steps to rebuild credit through on-time payments, a secured credit card and minimal credit utilization.
Personal financial management, especially after bankruptcy, is an ongoing process that requires commitment over the long-term. Starting off on the right foot with a legally sound bankruptcy is critical to being able to take the above steps and start anew. Individuals could benefit from speaking with a Michigan bankruptcy lawyer to support this process and ensure all legalities are observed.
