How to Bounce Back From Bankruptcy

"spotlight-bankruptcy"Bouncing back from Bankruptcy is something that is going to take you quite a bit of effort and patience but no matter how rough your situation seems, there is always a way out. Here, we are going to discuss a few of the best ways to bounce back from a Bankruptcy. The most important thing on your to-do list should be to work on your credit. Since you are started from ground zero all over again; this is a time consuming process.

Create a Budget for Yourself

Maybe you weren’t the best at keeping up on your bills and saving money but once you’ve filed for bankruptcy, you have been offered a whole new lease on life. Instead of dwelling on the past (this will just hinder your ability to move forward), focus on the changes you are going to make and the positivity of the situation. Things could have been a lot worse and you have learned many lessons thus far. If you are struggling to come up with a budget, you can always contact a financial advisor; they can walk you through the difference between ‘wants’ and ‘needs’ and give you some very insightful information that will help you on a day to day basis.

Pay Your Bills on Time

After a bankruptcy, it’s very important that you pay your bills on time. You really need to focus on creating a good reputation for yourself all over again. The longer you go with great payment history, the easier it is going to be to get loans, credit cards and things of that nature. After filing for bankruptcy, late payments are going to hurt your credit score that much more. Make sure you start off on the right foot after making the decision to file for bankruptcy.

Keep a Close Eye on Your Debt to Income Ratio

Knowing and paying close attention to your debt to income ratio is important because it greatly affects your overall credit. You want to be able to show potential lenders that you make enough money to be able to keep up with all of your monthly bills. There are many Debt to Income Ratio Calculators available online as well as worksheets that can be downloaded to help you get a better idea of exactly it is that you stand.

It’s also a good idea to do your best to keep your credit cards below 30% of your total credit card limit. This is going to show that you are on top of your bills and know how to manage how much you spend. When you start going too far above the 30% mark, this can negatively affect your credit score and potentially scare off companies as they aren’t sure you’ll be able to keep up with monthly payments.

Bankruptcy Affects Your Credit Report for 10 Years

When you file for bankruptcy, this decision sticks with you on your credit report for up to 10 years. While this sounds quite scary to most of us; the good news is lenders are actually a lot more forgiving these days with how the economy is. While it may take up to three years for you to start to qualify for things such as credit cards, mortgages or car loans, there are companies that are willing to take the risk. So, do not feel that your life is going to be ruined for the next 10 years. If you have the motivation, are educated on your current situation and do anything you can to increase your credit score, you can and you will get yourself out and have a happy financial future.

Nick Thomas owns financial comparison site which provides financial help to the readers from bankruptcy and debts. You can read his articles from on finance related issues.

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