Your New Life After Bankruptcy

Have you struggled for years trying to overcome one financial disaster after another?  Sometimes the only thing that can be done is to declare bankruptcy.  Having to declare bankruptcy can be a scary and overwhelming process, but it might help if you consider it your ‘do-over.’  Life after bankruptcy is your chance to rebuild your life and put all the financial mistakes and bad luck behind you.

It is entirely possible to have a fulfilling and successful life after declaring bankruptcy.  Many people come out of bankruptcy saying it was one of the best things they ever did.  You can learn and grow from this difficult time in your life.  And while you are doing it, there might be some questions you want to have answered.

Will My Children Be Affected By My Bankruptcy?

Unless your children are very young, it can be difficult to hide bankruptcy from them.  They will undoubtedly already have noticed a tension between you and your spouse, and might even have answered the phone when creditors were calling.

It is all right to explain to your children the basics of what is going on, especially if it will entail moving.  However, no matter how mature they are, don’t unload on them.  It might feel good to talk about it, but it will only lead to your children being under even more stress.  It’s better to assure them that everything is going to be fine.

Be aware that child support cannot be discharged in a bankruptcy.  However, college tuition funds might be affected.  Your creditors could insist you pay them first before contributing any more to a college fund.  Also, if your child has his or her own bank account, make sure it is in their name only and was opened under the UGMA, or Uniform Gifts to Minors Act.  This will protect their account from being forfeited.

Will Life After Bankruptcy Be Different?

It will, but consider it for the good.  Life after filing bankruptcy can be a fresh start, where you put past mistakes and misfortune behind you and forge a completely new path in life.  As it is with many things, the people with the best attitudes often have the most success, no matter what life has dealt them.

You will find it difficult to obtain credit after you have filed for bankruptcy.  Any credit after bankruptcy you get will likely come with a high interest rate.  Having a savings account and making regular deposits will help you get a secured credit card.  A secured credit card will have a lower limit than an unsecured one.  You should make sure you only use it if you can pay in full every month.

Can I Really Restore My Credit After Bankruptcy?

You definitely can, in fact buying a home after bankruptcy is possible too. As soon as your bankruptcy is finalized, it is time to switch gears and start focusing on the future.  Work on letting go of the mindsets that might have helped you along the way towards bankruptcy to begin with.  For instance, learn the difference between want and need.  Do not just pay it lip service, either.

There are very few things we actually need.  Some people say it comes down to food, water, air, and clothing.  That is really cutting it close, but there is some truth in it.  We do not need cars; cars just make our lives incredibly easier.  We do not need the latest electronic gadgets, the hottest jeans, or even a vacation.  All these things merely make life more enjoyable.

You don’t have to beat yourself up to adopt this mindset, either.  It is okay to splurge sometimes, as long as it is within budget.  You might even come to love this new lifestyle.  Many people do.  Some people have started blogs or written books about their new frugality, finding it extremely satisfying to reach out and help others with their financial difficulties.

Will I Ever Have Good Credit Again After Bankruptcy?

Yes, you will, if you work at it.  It is entirely possible to rebuild your credit up from bankruptcy and one day have a high credit score that will enable you to get the lowest interest rates on auto and housing loans.

Begin monitoring your credit report with the 3 major credit bureaus.  Make sure that your accounts that have been discharged because of your bankruptcy are no longer being reported.  If they are, send a copy of your bankruptcy discharge papers to each credit bureau and request that they correct any inconsistencies

Open a savings account and get in the habit of paying yourself.  Ideally, you should be saving 25% of your monthly income.  That can be difficult to do, yes, but imagine what it will feel like to have such a nest egg built up.  Save as much as you possible can, and do not touch it except for emergencies.  This is an excellent way to restoring your life after bankruptcy.

Be assured there is life after bankruptcy, and there is nothing to say that this life won’t be even better than your life before.  You have made the mistakes, you have learned from them now move on to a brighter future.  Very few people go bankrupt twice.