3 Financial Moves To Make Right After Bankruptcy

Getting bankruptcy discharged can feel like a relief, but it’s also just the beginning. With your debts discharged, you’re on your own to build yourself a better financial future. There’s no denying that the bankruptcy will follow you for a time, but the earlier you act the better prepared you can be for when it falls off your credit report. Here are three steps to take immediately after discharge to help protect your financial future.

 

Make Arrangements For Non-Dischargeable Debts

Check your credit report at annualcreditreport.com to see that everything was correctly discharged during the bankruptcy, and to get a feel for the remaining totals left for debts taht can’t be discharged. Student loans and income tax debt are difficult to get rid of in bankruptcy, so pay special attention to what, if anything, you owe in those areas. For student loans, contact your federal loan servicer and talk about their repayment options. Programs like income-based repayment, and occupation-related loan forgiveness could help make your loan payments more manageable.

For any tax debts, talk to the taxing authority. It may be the IRS, state revenue department, or local entity, but all of them have dealt with these situations before, and someone there will be able to help you get on track.

 

Look For A Secured Credit Card

This is a good step to rebuilding your credit score, and it doesn’t come with the same risks as a regular credit card. A secured card requires a deposit to be put in a bank account for a certain value that then becomes the limit of the card. So if, for example, you deposit $250, your card limit will be $250. This is a security measure for the issuer, to make sure they can always regain the value of the card.

However, by making small charges and paying them off every month, you can also start to build up your credit. Just be sure to be on the lookout for cards that charge high fees or ones that don’t report your payment to credit bureaus. After all, the whole point of you getting the card is so that is reflects on your credit. Be vigilant and pay everything off on time and some cards will even up your limit or convert you over to a regular credit card without additional deposits.

 

Create A Budget

Now that you’ve got your debts discharged, it’s more important than ever to keep yourself on track financially. Sit down and create a comprehensive budget that allows you to account for all your regular expenses and fit them within the scope of your income. Planning and sticking to a budget is one of the best ways to build more responsible financial habits moving forward, and making sure that all of your expenses are being taken care of by money coming in rather than credit will help you avoid more complications in the future. Just remember to adjust your budget as you adjust your life, such as if you move, if you’re planning for the holidays, or anything else that might change your financial resource allocation.