Start the New Year with a Clean Slate: 5 Ways to Financially and Emotionally Move on After a Bankruptcy

The new year represents a chance for new beginnings and this is particularly true for individuals who have made it through a bankruptcy the prior year. Bankruptcy is a particularly grueling process and coming out on the other side is no small feat. Still, it can be difficult for someone who has been through it to find the courage to get back into the ring. Here are some tips to easing the transition.

1) Change your perspective. There is such a stigma in our society regarding bankruptcy that taints anyone who finds themselves in the process. It can be deceptively easy to internalize the message and feel miserable. What is missing from this narrative is a discussion on how filing for bankruptcy takes bravery and fortitude, and seeing it through takes even more of those qualities. Remember also that the law created bankruptcy for a reason, which is to allow someone to get a chance to start over.

2) Identify your means. This is the time to take frank stock of your assets and what you reasonably expect to make in the near future. “Means” here also includes your expenses, such as those that you could jettison to free up cash. Evaluate all of your expenses to determine if they are the best use of your limited resources. Be open to considering making changes that are small, like making your coffee at home rather than going to Starbucks, or large, like downsizing your home or apartment to something that does not cost as much. Just being open to these possibilities and entertaining them can sometimes be enough to spawn some forward momentum.

3) Get educated. Chances are that if you went through bankruptcy, you were given some form of financial management education. This could have been fairly haphazard, however, and may not have addressed the root causes of how you found yourself in bankruptcy in the first place. The good news is that there are numerous free, high quality resources of information on how to plan your finances going forward.

4) Stay on top of your bills. One of the best ways to start to rebuild your credit after bankruptcy is to pay your bills in full and on time each month. This may sound obvious, but the reality is that it can be difficult. If you are still having trouble meeting all of your bills, revisit tip #2 and see what else you can cut. Cutting cable while keeping Internet access may free up enough cash to meet your other non-negotiable bills.

5) Dip your toe back into the credit pool. This can be a particularly difficult step, but in this day and age it is absolutely necessary. A poor credit rating can be scarlet letter (or number) that makes life difficult. Remember that your credit score is not going to be rehabilitated overnight, and patience is definitely required. However, it is possible to get it to start moving back up if you dabble in some low-risk and well-controlled forays into credit. If you are concerned about misusing a credit card, consider getting a card with a set limit that you know you can pay off each month. The act of paying off the card each month without incurring interest payments or penalties is the key as this will slowly, but surely, help nudge your credit rating upward.

Bankruptcy is not something you need to or should face alone. Attorney Timothy Starosta at The Starosta Law Firm understands your struggles and can help you navigate the bankruptcy process. Contact him today to get started.

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The Starosta Law Firm LLC

The Starosta Law Firm is a small firm dedicated to providing every client with the customized representation they require, no matter what type of situation they are facing.

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