Life after Bankruptcy

Going through a bankruptcy proceeding, either Chapter 7 or Chapter 13, can take a toll both financially and emotionally. Addressing the issue, many people feel shame and disappointment but in reality these feelings are counterproductive to the larger goal which is to rebuild your finances and your life. Often, bankruptcies result from unforeseen and uncontrollable factors such as unemployment, divorce, the death of a spouse, or unanticipated medical crises which often lead to crippling financial distress. Bankruptcy offers a one of the best financial planning tools or rare second chance to "get it right" by discharging most unsecured debt. Moving beyond the bankruptcy by building a healthy relationship with money and credit should be the focus of anyone in the aftermath of a bankruptcy.

Although a bankruptcy discharge may appear on your credit following a bankruptcy filing, in almost every case your credit scores are increased due to the disappearance of prior delinquent debt decreasing your debt to income ratios utilized by lenders in making loans. It is not surprising for a debtor in bankruptcy to receive offers for car loans and credit cards following a bankruptcy discharge. In fact prior fliers have successfully obtained mortgage loans to purchase homes within eight months of receiving a bankruptcy discharge. With strategic planning and careful money management, these are realistic goals achievable following bankruptcy. Rebuilding your credit and contributing to a savings account are two important steps.

Take the time to go through your monthly earnings and expenses. Thoroughly understanding your budget and analyzing where your money is going will help you stay on track. It is important to live below your means so that you avoid having to file an additional bankruptcy in the future. Remember, a bankruptcy, while disappointing in some respects, is a great opportunity to learn new spending and saving habits.

After analyzing your budget, begin your credit restoration by paying all your bills on time; setting up automatic payments if you are in the habit of forgetting recurring obligations. Often, unscrupulous credit card companies will prey upon people emerging from bankruptcy and bombard them with enticing credit card offers. Do not fall for this tactic. These are often credit cards with high annual fees and harsh penalties. Instead, ask your local bank if they offer secured credit cards. With a secured credit card, you deposit money into an account and then the bank will offer you a credit card corresponding to that deposit. So if you deposit $500 into this account, the bank will then issue you a credit card with a $500 limit.

While you are busy rebuilding your credit with on-time bill payments, try to save money each month. Saving money, even a little, ensures you have an emergency fund for unanticipated expenses which will prevent you from having to charge these items to a credit card.

Bucks County Bankruptcy lawyer John M. Kenney, Esq. with his 32 years of experience, offers free consultations to answer questions about bankruptcy. He will listen carefully to your circumstances and concerns and provide you with honest and straight forward answers to determine whether a bankruptcy filing is right for you. To schedule a free consultation regarding your Pennsylvania bankruptcy case, please call (215) 547-3031, email jmk@jkenneylaw.com, or fill out and submit our online Contact Us form.