Tips for a better life after bankruptcy
Published by admin on December 19, 2009
Tips for a better life after bankruptcy
So after you’ve finally been discharged from your bankruptcy, now you’re free to do what you want again. The world is back at your feet!
But before you grab a bucket and head to the beach, there are a few things you need to know. First and foremost, a bankruptcy discharge is not a license to act. That itch to celebrate your newfound freedom might be almost impossible to ignore, but if you want to be debt free, you have to play it on a low for a while, especially in the first three months after your discharge.
Here’s why: you probably feel like you’ve been in debt forever, but you’re not the only one who knows that. Credit card companies have caught the scent too, and the chances that you’re getting requests left, right and center in those days. Talk about temptation! The best you can start your debt free life is by throwing those applications right into the trash; no matter how much one company or another says that they want to help you rebuild your credit. The truth is that they don’t want to help you improve your credit score they want to help you get back in the position that got you into bankruptcy in the first place.
These ‘high-risk’ credit cards come with a lot of reservations – the fee that you have to pay to get the card, for example. Some cards will actually charge a fee for the card by placing it on your map. So if your card has a $100 limit, and it cost you $75 to get, guess what? You only have $75 in credit. Get over it and get ready for some unpleasant charges.
So how can you get your life back to normal? Before you do anything else, you need to change your spending habits. You really have to think about the cost and quality of the things that you buy and put yourself in control. For example, it is really worth to buy that brand-name bread when the store brand is just as good and costs one U.S. dollar less? It’s a small example, but if you can apply this kind of thinking in baby steps, very soon you’ll be able to use it for everything you buy, no matter how large. So, clip coupons, try to buy when things are for sale, and don’t go even misleading, when you buy.
Second, prioritize your bills. Their interest rates, must-pay-for-hour bill every month should be your rent or mortgage. It’s your shelter, and without it, handling anything that comes your way will be very difficult. Your utilities are next, because you have to be able to cook and store your food. Their third major bill can be telephone, the fourth your cable TV or satellite, and so on. Take an average of how much of your paycheck goes to rent / loan and bills. So set aside a little bit of each check to put towards each bill. It can be tedious, but believe me; it will be worth it when you get into the flow.
The second thing you need to do is save up to $500, the same as you’ve done for your bills – take a bit out of each paycheck. Only this time, open a new account. When you’ve saved $500, run to your nearest bank and ask for a secured bank loan for that amount. The Bank should have no problem giving your request because the money’s already there. For the next 90 days, make your payments on time every time. You will be amazed how much faster it will build your credit than high-risk card!
If you have to use credit cards, why not make it to your advantage? Here’s how: purchase an item’s for sale with your credit card. So when your credit card bill comes, pay the item off in full. That’s it! You will enjoy your new account a month before you have to pay for it. If you can keep to this, your credit card has nowhere to go but up.
By applying the above tips, your credit will be given a boost at a time when you need it most – in the first 3 or 4 months after a bankruptcy discharge. You’ve got a second chance. Don’t give up – you can do it! Just focus to stay out of debt!
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