Bankruptcy vs debt consolidation, which one is right for your current debt problems?

So you had to file for bancruptcy. Unforeseen circumstances can cause this to be the only option. However, just because you were once bankrupt does not mean that your future is grim.

Deciding to file for bankruptcy is not easy. But many people have had to and are now able to care for their finances stably. You can dust yourself off and get back on your financial feet even after bankruptcy.

Your credit can be repaired after going through a bankruptcy. Start by paying your bills on time. If you filed for a Chapter 7 bankruptcy, your debt would have been wiped out along with some of your assets.

You must care for the assets that you have been able to retain responsibly. If you still have your home, work on proving your ability to pay for bills on time by making all of your payments to the local utility company when they are due.

Secured credit cards, credit cards that require that a deposit be made by the individual applying for the card, can also help you reestablish credit. As you use your secured card, you will build your credit and eventually be able to qualify for an unsecured card.

Keep just one credit card. And don’t charge purchases on it needlessly. Simply having a credit card that can be used in emergencies is a way to build back your damaged credit.

Learn to pay in cash. Force yourself to refrain from making purchases without having the cash you need to pay for them. Paying in cash will also help you strengthen your bank account. This also prevents future debt problems, since bankruptcy often comes as a result of spending without having the cash necessary to do so.

Plan to succeed. Since you have already experienced bankruptcy, you know you don’t want to go through the process again. Establishing a good savings plan that includes an emergency fund will help you prevent any future need to file for bankruptcy. Credit card payments shouldn’t present any kind of problem after having had all of your debt eradicated.

Once you get that first credit card, companies will start hounding you. Don’t give in to them. Be flattered, but resist the urge to get started with the credit card debt cycle again.

Learn to live within your means. This requires that you be prepared for the unexpected. Credit counseling classes or meetings with a financial advisor can be helpful, since they will provide you with great tips on how to maximize your savings and care for your expenses responsibly.

A financial advisor can take the extra money that you put in a savings account and show you how to invest for the future. One day you will want to retire. Retirement could last as long as twenty to thirty years. Having enough money to live out that portion of your life is important. Concentrate on that part of your financial future as you wait with patience for your credit to be re-established.

Bankruptcy is not the end of the story. People can recover from it and develop a healthy financial picture. However, it takes time and patience.

About the Author:

Is debt consolidation the best solution for your credit problems? Find out how it can affect your financial health at the Debtopedia website. Visit http://www.debtopedia.com for more information and to get a free copy of my report on credit card debt.

William Blake | After Bankruptcy |

Tags: After Bankruptcy

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