Financial Steps To Take After Bankruptcy
Asset Protection Lawyer
Bankruptcy is designed to give you a fresh start in life, but it is not an opportunity to be taken lightly. The potential impact on your credit, paired with the restrictions on when you can file again, make it absolutely critical that you make the most of your new-found financial freedom. If you are getting ready to file for bankruptcy, or have already begun the process, prepare yourself now by knowing how to make solid decisions for your financial future.
Minding Your Budget
Regardless of whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you should begin budgeting now, before you ever even file. As mundane and as boring as it sounds, a budget can help ensure you know where your money is going each month, and it can help you avoid over-extending your finances. Starting the process now can help you practice this skill, and it can help you effectively prepare for a more secure financial future once the bankruptcy process is complete.
Deal with Your Non-Bankruptcy Debts
Not all debts can be included in your bankruptcy. For example, student loans are not typically included in either Chapter 7 or Chapter 13 bankruptcy. That means you will continue to be responsible for the entirety of the debt. The same applies to any delinquent child support or alimony you owe.
Prepare yourself now by devising a plan for paying off this debt. Better yet, talk to your bankruptcy lawyer and ask how you may be able to use effective asset planning strategies to pay down some of those debts that may not be included in your bankruptcy.
Cut Out Extra (and Frivolous) Expenses
Bankruptcy can humble you. It can remind you that what you consume – what you spend money on – can lead to financial ruin if you are spending more than you can afford. And that makes now the perfect time to take a careful and thoughtful look at where you spend money on a regular basis and determine if an item is truly a necessity, or if it can be removed from your life.
For example, are you still holding onto that gym membership you do not use? Would it be more cost effective to find a less expensive gym or even work out at home?
What about all those online streaming services and apps you have? Although the amount you pay each month for each may seem like only dollars, adding the total spent each month may shock you at how much these items are actually costing you.
What about those magazine and newspaper subscriptions? Are you actually reading them, or do they simply wind up in the recycling bin? Or, if you are reading them, can you save money by purchasing an online version instead?
Whatever you decide, know that you are paving the way to a better financial future by cutting away the excess.