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Life After Bankruptcy: Why Recovery is Easier Than You Think

Whether you're considering filing for bankruptcy or you have already begun the process, the most important thing for you to understand is that you are not alone. Financial hardship is something that can affect anyone, as evidenced by the two million bankruptcy filings that were initiated in 2005 alone. Financial hardship, unexpected major expenses, economic downturn - these are all major contributors to bankruptcy and are not necessarily things that you could control.

It is imperative that you understand that you are not alone. Recovering from bankruptcy (especially in terms of your credit) isn't necessarily something that you can do overnight, but it's probably a lot more straightforward and stress-free than you think it will be. If you really want to start re-enforcing the stable foundation of credit after bankruptcy that will play a role in determining your financial future, there are a few key things to keep in mind.

1. Understanding Your Situation

The most important thing to do on your road to recovery after bankruptcy is gain a better understanding of what led you here in the first place. Examine the personal finance choices - both large and small - that contributed to your bankruptcy. While there were absolutely things that you couldn't have predicted or avoided, were there certain decisions that you made that you wish you could take back? Where there changes about your spending habits that, in hindsight, should have been made earlier?

There's no shame in making a mistake, provided that you're willing to learn from it. Examine your finances and look for positive changes that you can make on this road to recovery.

2. You Can Still Get Credit, Loans, Mortgages, Etc.

It's a common misconception that because bankruptcy stays on your credit history for ten years, you'll be unable to get as much as a credit card during that time. In reality, it's actually easier in certain situations to get a credit card or a personal loan for a very simple reason: risk.

Because you've just filed for bankruptcy, creditors know that you can't do it again for quite some time. This makes certain types of creditors actually MORE likely to offer you lines of credit because they know you won't be able to discharge it.

Many experts recommend getting a secured credit card - one where you make an initial deposit and are then given a line of credit between 50% and 100% of the deposit amount - as soon as you can after you are discharged from bankruptcy. Make small purchases on the card on a regular basis that you pay in full each month to begin the slow but steady recovery process.

3. Be Extra Vigilant About Your Credit Report

It's always important to make sure that your credit report is free from errors, but it is especially so after you've filed for bankruptcy. One small improperly noted debt can have big ramifications, so check your credit reports from Equifax, Experian, and TransUnion on an annual basis to make sure everything is accurate. 

If you happen to find errors that you're having a difficult time getting corrected on your own, don't be afraid to enlist the help of experienced professionals like us. You may be able to get damages and attorney's fees from the ex-creditor.