It is time to reframe our perception of term bankruptcy. Despite the circumstances that lead to someone deciding to declare being unfortunate, filing for bankruptcy can be viewed as a useful tool for empowering those who have accrued significant debt.
The act of filing for bankruptcy shows creditors and banks to which debt is owed, that something is being done to make things right again. Filing for bankruptcy can actually empower individuals and businesses who have un-payable levels of debt by demonstrating proactive behavior.
As a bankruptcy lawyer Norwalk, CT residents prefer from The Law Offices of Neil Crane can explain, there are negative consequences of bankruptcy such as hurting your credit or chances for mortgage qualification, nonetheless the end result can be a positive one and can be a chance for a fresh start financially.
After successfully declaring bankruptcy there will be challenges, but by implementing objective strategies, the process of recovery becomes less overwhelming.
Habit Changes to Build a Strong Foundation
The time following a bankruptcy declaration is the perfect opportunity to form new positive financial habits, habits which foster stability and help avoid behaviors that led to this point.
Consider implementing these strategies during the process of filing and after finalizing the bankruptcy declaration:
Maintain thorough records of all documentation from the process.
Keeping an extensive and organized filing system of all paperwork that pertains to the process will help make future financial processes easier. After bankruptcy when applying for a mortgage, loan, or other financial product, documents pertaining to the bankruptcy will likely be required. Having these documents easily accessible will ensure that every measure was taken proactively, boosting credibility and complete transparency.
Establish new healthy financial habits.
This means developing a realistic budget and strictly adhering to it. One practical budgeting strategy that anyone can benefit from is evaluating anticipated income and factoring in anticipated monthly expenses, and savings goals. Never spend more than what is budgeted as extra money. Save every penny possible to help be prepared for unexpected expenses and setbacks, such as car repairs or damages or medical bills. Having a safety net will help reduce the risk of falling back into the cycle of debt.
Begin rebuilding credit.
Although the process can be slow, regaining credit health is an essential component of any plan for recovering financially after bankruptcy. Paying bills consistently and on time is the primary way credit can be restored to healthy levels, and demonstrates behavior that is positive and proactive to credit agencies such as FICO. Seek out tools and resources that provide insightful credit history information and actionable steps to take to improve credit scores. Once credit has been restored, there will be a significant increase of financial tools available.
With time, diligence, planning and record keeping, recovery from bankruptcy is feasible. It is even possible with time to emerge stronger and more prepared than before declaring for bankruptcy. Although the process is emotionally taxing, never lose hope for what is possible through objective application of the tools, principles, and changes in mindset.