While filing bankruptcy in the first place may not have been because you spent too much, saving money after filing is perhaps the best decision you can make. While it may seem obvious that overspending after a bankruptcy is unwise, many make the mistake of falling into old buying habits with clean credit cards and more cash.
You may have some trouble getting a loan or credit card. It takes time to rebuild credit after bankruptcy. But it can definitely be done and you can start buying soon enough. The only problem is that some take this to the extreme. Saving money is the answer. This article says saving money can be a challenge, but it’s one you have to take.
Don’t Make the Same Mistake…
What got you into the problem that caused you to file for bankruptcy? In other words, what did you spend money on, what medical bills did you get, what interest rates did you face, and what bills did you struggle with? Sometimes it’s not your fault you filed bankruptcy. You may have suffered an injury, received a medical bill for $40,000, and just had to file.
It makes no difference why you filed, because you should save money after filing for Chapter 7 or Chapter 13 bankruptcy. The more you save, the better chance you have of avoiding filing bankruptcy a second time.
Protect What Assets You Still Have
You likely have some assets and properties you want to keep. Maybe you filed bankruptcy to protect them. Now, with whatever money you have saved and made, put it in the bank account. Instead of blowing your checks on expensive dinners and other items, you can protect your home, car, and other assets. If you run into trouble again, you might not be able to file bankruptcy a second time (you have to wait 8 years for Chapter 7, and 6 years for Chapter 13). Therefore, if you want to keep what you have, save it.
Pay All Bills Early
One bad habit many of us get into is paying bills on the days they’re due or paying a late fee because we forgot. This needs to stop if you want to truly save time, money, and headaches, not to mention rebuild your credit. In order to rebuild your credit, you need to avoid being late on bills, and the best way to handle this is to pay them early.
Build Your Credit
As just noted, the more money you have the better opportunity you have for paying bills on time. If you save more money, logic says you can rebuild your credit. If you save money, and pay bills on time including credit and loans, you are rebuilding your credit in the best way. You can then be able to get a new credit card or loan when you need it. This is a big benefit many overlook.
Yes, spending money can be fun. And when you have a job, you deserve the right to spend money the way you want. But true financial freedom comes when you save. You need not hold off on certain bills to pay your mortgage. You need not take creditor phone calls all the time. And there is no reason to worry about a second bankruptcy if you have money saved. Bankruptcy itself frees you from debts. Take advantage of that benefit.