During a 12-year period between the years of 2005 and 2017, approximately 12.8 million people in the U.S. filed a consumer bankruptcy petition. For many, bankruptcy represents a fresh financial start, which is great – especially for those who feel like they are drowning in debt.
While the actual bankruptcy process is often tedious and time-consuming, once it is over, there’s a sense of relief. However, what some people have found is that they are now wondering “now what?” Many people don’t make a plan for what they will do after bankruptcy.
Don’t worry. Here you can learn several steps to take after your bankruptcy is complete.
1. Keep All Bankruptcy Related Documents
While it may be tempting to rid your life of memories of your excessive debt and throw away everything related to your bankruptcy – don’t. You need to keep a copy of your bankruptcy petition (which you can get from your attorney), along with a copy of your discharge order provided by the court.
Keep these in case you need to refer to them. This need may arise if you are applying for new credit, such as a mortgage, or if a former creditor attempts to collect an old debt. If you have misplaced any of these, your attorney should have a copy, along with the court system.
2. Monitor Your Credit Reports
You can get a free copy of your credit report from all three of the major reporting agencies one time a year. It’s a good idea to take advantage of this and see what creditors are saying.
However, wait a bit before doing this. Wait approximately three to six months after your bankruptcy case is closed to check everything. It can take several billing periods for your creditors to note the change in your credit report.
Check and see that all discharged debt from the bankruptcy is not being reported. You want to ensure it’s not counted against you as outstanding debt, especially if you plan to apply for new credit down the road.
3. Build Your Credit with a Secured Credit Card
Another way you can rebuild your credit is by applying for a secured credit card. This is usually approved for anyone, as you deposit money into the account as a security measure. The limit on your card is the amount of money you place in the account.
By doing this, you can begin to rebuild your credit by paying on time. Just like unsecured credit cards, a secured credit card will report to the credit bureau, helping you rebuild your credit score.
Taking Charge of Your Finances After Bankruptcy
Once your bankruptcy case is complete, you may breathe a sigh of relief; however, it’s not time to rest. You need to take the steps here to ensure that you restore and rebuild your credit.