After the start of a new year, we are all bombarded by ideas for how we can do better in 2019. Diet changes, exercise, less time on social media. While these are all admirable goals, some people should focus on something much more important, which is making resolutions to help them avoid filing for bankruptcy.
Ideas to Help You Avoid Filing for Bankruptcy
While these ideas are geared toward avoiding bankruptcy, they are also things that will help anyone who needs to better budget their money, save more, or get their finances in order.
Figure out how much money you spend each month. The results will likely be surprising, but it will help you put together a budget to get a handle on your spending habits. Once you know what they are, think about where you can cut back and hopefully earn some money back. This means big stuff, such as:
Can you sell your current home and move to a less expensive one?
Can you sell your car, and purchase a less expensive one?
Do you have large items, such as a boat, motorcycle, or recreational vehicle you could sell?
Can you forego a big vacation this year?
It should go without saying, but any money you earn from these cutbacks should go directly toward paying down your debt. Making some real sacrifices on this big stuff can make a significant difference, but so can cutting back on the small stuff. Try to eliminate all spending beyond the absolute basics of food, clothing, shelter, and transportation. That includes all the little luxuries most of us now consider necessities, such as:
Cable/satellite/online streaming services
Mobile data plans
Once you’ve minimized your expenses, it may still not be enough to pay off all your debt and completely eliminate the threat of bankruptcy. In this case, you need to maximize your income. Hopefully you already have a job, but if you don’t, now is the time to get one. If you do already have a job, take a second job. The same applies to your spouse or significant other if you have one. Any extra income you have should go directly toward paying off your debt. Make a Permanent Change Unfortunately, there is such a thing as a “serial bankruptcy filer.” These people use recovery from bankruptcy as an excuse to spend beyond their means again. Make the decision that you will not follow this example. Once you have gotten your feet back on solid ground, make a resolution to never let yourself get back to that place again.
Discover Tom Bible Law in Chattanooga, TN
If you are struggling with excessive debt and looking for a sound solution, the attorneys at Tom Bible Law, can help you explore your legal options. We have helped numerous clients from Chattanooga and throughout Tennessee and North Georgia achieve their debt relief goals by guiding them through the bankruptcy process. We work with every client personally, giving each and every bankruptcy case the time and attention it needs. We understand the financial pressures our clients are facing and work to resolve their debt problems in a favorable, cost-effective manner. Our bankruptcy lawyers have more than 80 years combined experience and are here to help. Call us today at423.424.3116 or drop us a note here.
Filing for bankruptcy is no joke, and obviously, should be taken very seriously. But it certainly isn’t the end of your life or your credit. You need to be proactive though, taking steps as soon as possible after bankruptcy to rebuild your credit.
You can also take comfort in the fact that even though a bankruptcy is visible on your credit report for several years, it actually stops affecting your credit score well before it drops off.
In the meantime, here are a few things we would recommend doing to help repair your credit after a bankruptcy. Don’t repeat history. Whether your bankruptcy had to do with excessive spending beyond your means or circumstances beyond your control, do what you can to make sure the same thing doesn’t happen again. This could mean drastically reigning yourself in with a strict budget. It could also mean creating a rainy day fund or really focusing on putting money into savings. Get back on the credit card horse. It may seem counterintuitive, but one of the quickest and best ways to rebuild your credit after bankruptcy is with a credit card, particularly a secured credit card. Of course, you don’t want to pile up more debt, but a positive payment history is crucial. There is a little more involved with actually getting a credit card after bankruptcy, but it is possible. Brace for big purchases. If you need to make a large purchase, such as a car, you need to have used your credit card responsibly for at least six months. This will add to your credit score and show that you can be trusted to make on-time payments. If possible, it’s also a good idea to save some cash for a down payment. This will help lower your financial burden so you don’t set yourself up for another debt trap. And even bigger purchases. If buying a car is a big deal, buying a house is much bigger. You will have to wait a specific amount of time based on the type of bankruptcy you had and the type of loan you want. This period will typically be two to four years. You will also have to be able to show at least 12 consecutive months of on-time payments and permission from the court to take on new debt. It’s possible that you might see higher down payment requirements, such as 10% down instead of the traditional 3.5% for an FHA loan. In order to repair your credit after bankruptcy, it will take time and effort. It needs to be obvious that you are making an effort to be more responsible with your financial choices, paying bills on time, and managing your debt better. Making even small, smart choices everyday after your bankruptcy will slowly but surely rebuild your credit and your reputation as a trustworthy borrower.
If you are struggling with excessive debt and looking for a sound solution, the attorneys at Tom Bible Law, can help you explore your legal options. We have helped numerous clients from Chattanooga and throughout Tennessee and North Georgia achieve their debt relief goals by guiding them through the bankruptcy process. We work with every client personally, giving each and every bankruptcy case the time and attention it needs. We understand the financial pressures our clients are facing and work to resolve their debt problems in a favorable, cost-effective manner. Our bankruptcy lawyers have more than 40 years combined experience and are here to help. Call us today at423.424.3116 or drop us a note here.