Life After Bankruptcy

After filing for bankruptcy, you are given a fresh financial start. Your credit history is wiped clean, and your credit depends on your future decisions. Here are some tips to help rebuild your credit and to keep you financially strong.

· You will now receive many offers from lenders to finance your home or vehicle(s). They will offer you new credit cards. Most (if not all) offers should be disregarded.

· Apply for a single credit card. Be sure to only use it for charges that you can pay off each month.

· You may want to apply for a gas credit card. All gas purchases that you would have paid for in cash can go on your credit card and help reestablish your credit.

· Open a savings account, and add money to it each month. The best way to do this would be to have money from your paycheck automatically placed into savings each month.

· Pay your rent and bills for telephone, utilities, cable, etc. on time. Live within your means and cut out all expenses that you do not need.

· Join a credit union or search for car dealers that claim to be “bankruptcy friendly,” and buy a used car. Before the purchase, ensure that you will be able to make all payments on time.

· If you need to make a large purchase, ask a relative or friend to cosign for you on a loan. Work out a budget, so that you’ll be assured to pay back the loan on time.

· Do not use paycheck advances (or “payday loans”), as they involve extremely high interest rates (usually in the range of 390 to 780 percent). These loans can easily trap the borrower in a cycle of debt.

Your main goal is to prove to lenders that you can responsibly handle money. Seek out ways to save money in a savings account, pay all debts on time, and carefully use credit.