How to Financially Recover after a Bankruptcy

6 December 2016
 Categories: Law, Blog


It is important to make sure that you are doing everything you can in order to quickly recover financially after you have gone through a bankruptcy. This way, you are less likely to find yourself in such a financial mess again.

Start to Build an Emergency Fund 

You will want to implement some strict budgeting for a few months, as this will allow you to place all of your extra money into a savings account. This money will serve as an emergency fund, which should only be used in true emergencies. Such emergencies would include a broken furnace in the middle of winter or the payment of your utilities because there was a sudden loss of employment. It is a good idea to build up your emergency fund as much as you can. However, if you need to have a specific goal in mind, you may want to try to build it up enough to cover two or three months of your household bills, just in case you lose your job in the future. That should help you get through the rough patch while you are looking for more work.

Stay Away from Credit Cards

Do not make the mistake of applying for a credit card after your debt has been discharged through bankruptcy. Many people find themselves shocked that they even receive credit card offers in the mail shortly after bankruptcy. However, creditors know that any new credit card debt will have to be repaid because you cannot file for the same chapter of bankruptcy for many years, especially if you were just discharged from a Chapter 7. Creditors believe you are fair game at this point, but you need to avoid the temptation. You will need to get into the habit of paying cash for everything instead of turning to credit cards. After all, one credit card can quickly turn into several credit cards and mounting debt.

Take a Budgeting Class

If you are having trouble with poor spending habits, even if you are sticking with cash payments, you may want to consider taking a budgeting class. Such classes can teach you how to set minimum spending goals while still working in some fun extras in life. This way, you will not feel deprived of going out to eat or going shopping, but you'll learn how to do so in a way that is financially manageable.

For more tips on filing for bankruptcy and recovering financially afterwards, check out and talk to an attorney.