Whether your bankruptcy is over in months (Chapter 7) or the three to five years required for a Chapter 13 debt discharge, if you do all the court requires, at some point, you will emerge debt-free from bankruptcy.
What happens next? Below is some good information to help former debtors keep their finances in the black and not the red.
Stay employed
Hopefully, you already have a job. If not, kickstart your job search in earnest. But if you ever want to re-establish credit, having a solid, long-term job history is very important. Even those who freelance should try to have a roster of clients they have long work histories with so that they can show stable sources of income to prospective lenders.
Avoid the path to bad debts
Once you are cleared of your debt, your mailbox will begin to overflow with offers of high-interest credit cards. Don’t fall into the trap of signing up for all these offers. Since having a credit card for emergencies is a prudent financial decision, sift through the offers carefully. If you find one with no annual fees and a relatively low interest rate, apply and use this card only when absolutely necessary.
Keep a running balance in your bank account
This shows financial stability and could make your bank willing to extend an offer of credit to you with far better interest rates and terms.
Live within your means
Unless it was medical or non-dischargeable student loan debt that landed you in hot water, it likely was profligate spending. Rein in your worst spending impulse and vow that if you can’t pay cash, you’ll wait to buy it.
The last thing you need after a bankruptcy discharge is another debt mountain, so make sure that you learn from your financial missteps and emerge on firmer footing after your debts get discharged.
