Bouncing Back from Bankruptcy

According to the National Bankruptcy Research Center, 1,350,000 people filed bankruptcy in 2011. Creditcards.com reported that in New Jersey alone, 36,961 people filed bankruptcy in 2011. Many people feel disheartened after filing bankruptcy and wonder how they will ever recover their financial footing. People in New Jersey and across the nation should know that there are some steps they can take to recover from filing bankruptcy and build a more solid financial future.

Identify What Led To Bankruptcy

People find themselves needing to file bankruptcy for a variety of reasons. Whether it was due to having inadequate savings to carry though a job loss, unexpected medical bills or letting credit card debt accumulate, it is important to identify the events that led to bankruptcy and make a plan so that the same thing will not happen again in the future. Seeking the help of a professional financial adviser may be helpful in creating a budget and exploring savings plans.

Check Credit Reports

As much as people may not want to see their credit reports after filing bankruptcy, it is important to examine them thoroughly to ensure the accuracy of the information on the reports. They should check to see that all of the debts that were discharged in bankruptcy are no longer on the reports.

Use Existing Obligations

Not all debt is discharged in bankruptcy; obligations such as child support, some tax debt and student loans are not dischargeable. People can help rebuild their credit scores by making timely payments on these bills.

Consider A Secured Credit Card

Another way to rebuild credit is through a secured credit card, where a borrower deposits an amount of money equal to the card's limit with the bank issuing the card to protect against default. People who may not be able to get traditional credit cards at favorable lending terms may want to consider secured cards. However, borrowers need to make sure that the bank reports secured credit card payment history to credit reporting agencies before taking out such cards.

Be Wary

People who recently filed bankruptcy need to watch out for scams. Businesses promising to improve credit scores cannot do anything for a person that he or she cannot do on his or her own, and will charge fees for their work.

With time, planning and commitment, people who filed bankruptcy can rebuild their finances and move forward into a brighter and more secure future.