What Happens After Bankruptcy?

Now that everything is over you're probably realizing you're not sure of what to do next--what happens after bankruptcy

? Well, not much--unless you make it happen.

All of your past debts should be marked down as included in bankruptcy. Shortly after things have finished you should get a copy of your credit report and make sure this has been done, because often companies will leave your past debts marked as overdue or late, and this will hurt you a lot in the future. A lot of people feel ashamed of their recent financial problems and avoid doing this, but don't! It really is important.

If you let your past problems get to you, feel ashamed, and avoid doing anything about your finances after bankruptcy then your credit score will remain very low, and in seven years this will all age off of your report. Even at that point your score will still be low, however, because you won't have built up any new history.

In order to build up a new credit history, and a new life, you need to take charge and make things happen. Get a secured credit card, probably from your bank, and this will help you build up some new card history. You'll need to have a few hundred dollars to deposit into a savings account as collateral on the card. Use it lightly, less than thirty percent of your limit, and pay it back each month to build up a responsible history.

Build up an emergency fund. While this won't directly effect your score, it will because when things come up you'll use your savings instead of charging large bills on cards and getting into some bad financial situations. With $1,500 in a savings account when your car breaks down or you have other unexpected expenses you'll be prepared.

Within about a year you'll want to apply for a small loan. Use this for a car or college courses or anything else you may need. You'll still have a low score and be paying a high interest rate, but if you keep on top of the payments you'll be building up a positive loan history and improving your score.

The temptation to sit back and avoid your finances can be a great one after everything you've been through, but if you don't make it happen, nothing will happen after bankruptcy, and eventually you'll come to regret that. Build up a healthy financial history and give yourself some ground to stand on.

by: Jennifer Quilter

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