Once you’ve finally finished filing all the paperwork to get your debts discharged, after focusing on it for so long, it can be startling to realize you don’t really know what to do next. Rebuilding your life after bankruptcy can seem intimidating, but once you know where to start you’ll find your direction quickly enough.
About a month after everything has been finalized you want to get a copy of your credit report and make sure that everything that is supposed to be marked “included in bankruptcy” is. If not, call the companies and keep calling until they have it changed. You’ve come this far, go the last mile and get that debt taken care of.
After this has been done your credit of course won’t be great, but you do have a clean slate. The problem is that financial companies won’t know if they can trust you or not because they don’t know if you’re going to get into more debt, or if you’re really stable now. Your goal is to build up a new history after bankruptcy that will show them that you can handle making payments, which will build up your credit score as well. In as little as two years you can have decent, and possibly even good, credit. You do this by building a history of on time payments on the two types of payments that make up your financial history, revolving payments (credit cards) and installment payments (loans).
Of course, most companies won’t go ahead and give you these opportunities the way they did before you had financial problems, but you do have options. Shortly after you’ve finished discharging your debt go to your bank and get a secured credit card. Basically, you deposit a few hundred dollars into a savings account, which is used as collateral on the card and sets your new card limit. Use this card each month, but use it lightly (staying under thirty percent of the limit) and pay it off in full in each month.
About six months to a year later use your vehicle, a CD at your bank, or something else of value as collateral for a small loan.
The most important part of all these plans is to make sure that you don’t get in over your head and make all of your payments on time each month. Keeping a good budget plan is key to rebuilding your life after bankruptcy.