4 Steps to Recovering from Bankruptcy
Declaring bankruptcy is scary and might feel like the end of your financial world. You may think you’ll never be able to raise your credit score enough to get another loan, buy a house or car, or take out a credit card. However, you can recover from bankruptcy over time by using the simple steps below.
1. Understand What Went Wrong
The first step to being able to recover from bankruptcy is to stop looking down on your decision and to understand what went wrong in the first place. Learning from the mistakes you made that led to declaring bankruptcy will ensure that you don’t ever have to declare again. Treating bankruptcy like a clean slate or second chance can help you get motivated to better manage your finances.
2. Create a Budget and Pay Bills on Time
The key to staying out of debt is spending less than you make. It’s a simple concept, but many have a hard time with it. Creating an accurate budget that details exactly how much money you can spend on bills, necessities, leisure, and fun will keep you on track. When you know how much you have to spend, you’re much less likely to go overboard.
While you’re setting up your budget, it’s also smart to take time to set your bills to auto-pay. Paying your bills on time is the best way to rebuild your credit score, and auto-pay ensures that you don’t forget or let due dates slip by. Most companies will even send you text alerts before they deduct the money, so you can make sure you have the bill covered.
3. Start Saving
If you’re living paycheck to paycheck, starting a savings account might seem like an impossible goal. However, if you can put away an extra $20 or $40 from every paycheck, it’ll begin to add up. After a while, you’ll have enough money saved to provide a financial cushion in case something goes wrong. Emergency medical expenses, car repairs, and other unexpected costs can come out of the blue. Your savings will keep you from missing bill payments and falling back into a cycle that can lead to bankruptcy.
4. Take Out a Secured Line of Credit
Once you’ve been able to rebuild your credit a bit, you may become eligible for a secured line of credit. This is different than a credit card because you put money down ahead of time. Unlike debit card activity, your purchases and ability to pay your balance on time are reported to credit agencies, helping to build your credit more quickly than before.
Even if you’re taking all of the right steps, emergency expenses and unexpected costs still happen. To keep from falling behind, AmeriCash Loans is here. We can get you the money you need, fast, and help you stay up to date on your bill payments. Apply online or in store today to get your cash.