In our modern day economy, people file for bankruptcy more than often you would probably think. People get into more debt than they can handle, and they must file bankruptcy in order to be relieved of their debt. Any financial advisor or lawyer will tell you that you should do everything in your power to save your financial situation before you file bankruptcy. Filing bankruptcy is a last resort option for those who are absolutely panic-stricken and desperate.
The reason they would say this is because filing for bankruptcy is a very serious action to take. An official statement of being bankrupt can greatly affect your financial future for years to come. For example, the fact that you filed for bankruptcy will appear on your financial record for 10 years after the file has been made. This will greatly affect your credit score, your ability to get a credit card, ability to get a job, and your life insurance premiums.
Needless to say, filing for bankruptcy is not a decision you want to make flippantly. It comes with very serious consequences.
Henceforth, filing for bankruptcy should be a decision that you make when no other decisions are open for you to make. It should be the decision you make when you’ve backed yourself into a corner with debt and the only option is to throw in the towel and give up.
Unfortunately, as mentioned above, too many Americans in recent years are having to make this decision. The recent downturn in the economy has greatly affected Americans’ attitudes about and behaviors regarding their financial situations.
But what happens after you are officially declared bankrupt? Is there any hope at all for you? The answer is yes. It may not seem like there is hope for your miserable financial situation, but there is indeed hope.
There are several things you can do to start recovering from bankruptcy. The overall goal you want to keep in mind is that you don’t want to go down the same path that you went down previously.
This is a logical goal, because the path you went down previously led to bankruptcy. If you make decisions differently in the future, hopefully this new path that you take will not lead to bankruptcy.
To begin working on this goal, one of the most important things you’ll want to check is your credit reports. Making sure that they are up to date is of utmost importance.
Checking to make sure your credit reports are up to date entails being certain that any and every discharged debts and/or closed accounts are reported. In order to help with this, you can request one free credit report per year from each of the main three credit-reporting agencies (Equifax, Experian, and TransUnion). Another crucial thing to do after filing bankruptcy is to face the real problem at hand. If you have a problem with spending, face this issue.
Ignoring or running from the problem is never going to help the problem get resolved. The only way to fully deal with the problem in a healthy way is to face it and work through it.
Working through the real problems at hand could mean a lot of different things from different people. Some people may need to seek financial counseling so they can work closely with a financial planner to help them get back on track.
Some people may need to see a therapist so they can start working through some of their anxieties or other issues surrounding money. Still others may need to work through rocky relationships with family and friends who may have been affected by their out of control spending.
Something that everyone that faces unexpected expenses can benefit from is learning basic financial skills so that bankruptcy does not occur again. One imperative basic financial skill to learn is how to make a budget. There are many resources online for making budgets that are free and open to the public to use. These resources include step-by-step guides on how to make and keep budgets.
Some websites even include free excel spreadsheets that you can download in order to get a jumpstart on your budget. Making a budget is not difficult; the hard part is sticking to it.
Hopefully, though, individuals who have gone through the pains and hassles of filing for bankruptcy will be self-disciplined enough to stick to a budget that they have made for themselves.
Filing for bankruptcy is sometimes necessary, but there are ways to cope with the decision once you have made it.