On-time installments and cautious utilization of a made-sure card or advance are critical to revamping credit after bankruptcy.
Bankruptcy
Bankruptcy or bankruptcy is one of the legal rights you must tell your creditors that, unfortunately, you do not have enough money to pay them. Deliver all your possessions of value and title (you cannot take away your television because there is no legal proof that it is yours), and you must start from scratch.
You spoke with lawyers, or you did the process yourself, and after all, you left without owing money to the creditors (unless they are student loans or government debts); and you are ready to rebuild your life.
Make sure it does not happen again
For some people, the bankruptcy process was something that could not be done to avoid, the debts were necessary, but the economic crisis took away all the savings, all the years of a healthy financial life, and impeccable debt management. To our surprise of us, financial advisers are that there are many more cases that deal more with people who did not know how to manage their debts; they thought that credit cards were free money that only paid the minimum, they had no savings, and when they came to account the monthly payments of the debts were more than the income of the house.
Whichever the case may be, it is crucial to start by taking personal finance courses (it is free on the internet) and learn how to live without debts as necessary in our lives. Many people think that fixing credit is the only thing necessary to get out of bankruptcy, but you must also fix your savings habits and money management.
First Step: Having a Personal Budget
When you do not have credit, everything you buy will be in cash, and you must ensure the income you have planned for the large purchases made in the coming months. A simple budget is how much you earn – [how much do you save + less how much do you spend]; keep in mind that savings go first than your expenses. With a budget, you can know how much money you can spend and how much you can spend on upcoming purchases and for any emergency you have. You can visit How to Make a Personal Budget for more information.
How to repair my credit after bankruptcy?
Here is the point at which good management of your finances and a savings plan will help you. Your bankruptcy will affect your credit for at least 7 to 10 years. But this does not mean you cannot start putting good information in your report. Many banking products go to your credit, which you can do without considering your credit history. The primary reason these products are your own money that you give as a guarantor to the bank. The most effective way to restore your credit after bankruptcy is by opening an insured loan or a secured credit card.
If you do these for two or three years, the credit offers will begin to arrive in your mail again, but beware, these offers were the ones that got you into the roll in the beginning. Visit the 10 Commandments of the Credit Cards to learn how to handle them more effectively.
And how do I avoid falling into bankruptcy again?
I hope this does not happen to you again, but we do not know about tomorrow. The key is to do everything possible to lead a healthy financial life: Save, buy cash, Save, live below your income, use credit with a plan, etc. Educate yourself with books, blogs, internet sites, and how to keep your finances in order; at the end of the day, bankruptcy will be only a shadow of what was another life.
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