Apart from the obvious financial strain that is to be expected with bankruptcy, one of the major concerns that people have when in bankruptcy is the uncertainty of how a bankruptcy will affect your future. Bankruptcy will give you sleepless nights for sure as you worry about the future and how things are going to turn out. The good news is that bankruptcy is not permanent and rebuilding your life after the fact is very much a possibility. The important thing is to ensure that you do not backslide. Here are some tips to keep you from going bankrupt again.
- Make a budget and stick to it. This way you will be able to have a good understanding of what's going in and what's going out.
- Use cash. Now that debts are in your rearview mirror, consider having a cash only budget. Fixed bills such as mortgages, leases and car insurance can be set up as direct withdrawals from your bank account. However, for things like groceries, gas and even the occasional take-out dinner, try and use cash.
- Ensure that you pay your utilities on time. Utility companies don't usually report individuals to the credit bureau until you have missed a number of payments. Avoid damaging your credit rating even further by taking care of your utilities on time.
- Beware of scams. There is no shortage of people on the internet looking to make a quick buck at your expense. Beware of companies, particularly online, offering credit repair services. The truth is that no one else can repair your credit apart from you. Paying someone to do that for you does nothing to speed up the process.
- If you need to borrow again, make sure that the amount you borrow does not exceed what you earn in a month. This golden rule is key in ensuring you do not get yourself in a hole again. For example, if you earn $4000 a month, make sure that you do not have a debt of more than $4000 at any given time.
- This might be a sore spot but it is just as important in ensuring you stay on track. Do not be shy in talking about your bankruptcy, seek advice wherever possible and don't be afraid to use bankruptcy assistance services such as Safe Haven. Use that knowledge to educate your friends, children and even yourself on steps to take to avoid bankruptcy.
- Invest your money in a Registered Retirement Savings Plan as well as Tax Free Saving Accounts. Doing so will prove to banks that you can be responsible with your finances. In addition, putting your money into a retirement savings plan could lead to bigger tax refunds which could be used for purchases and more savings.
- Avoid financing a car purchase. It would be much better for you if you saved up and paid upfront for the car. Even though you might go to an 'all applications approved' dealership, the thing to remember is that the dealerships charge interest so you might be in for more than you bargained for. Unfortunately, high interest car loans are why many people file for bankruptcies a second and even third time.
As mentioned before in the beginning of this article, bankruptcy is a season and not a life sentence. The key to remaining debt free is simply taking the above steps and you should be back to your old self, living your best life.