One of the most emotionally stressful financial situations a person can be a victim of or family is bankruptcy. This situation is however very rampant in the America of today. A statistic of 1,538,033 was recorded in 2010 by the uscourts.gov as the highest amount of on-business bankruptcy filings. Millions of Americans continue to face the realities of bankruptcy even after the recession. The emotional relief that can come as a result of bankruptcy is usually overlooked when considering the side effects of bankruptcy. In the case of some people, bankruptcy can ease the financial burden as they learn to navigate their financial life without the stress of mounting debt. Consider contacting a qualified professional or advocate to walk you through what bankruptcy would mean for you as a person if you have not filed for bankruptcy yet. As wrong as bankruptcy can sound in most cases, there are some cases where it can be the only solution. If you have already filed bankruptcy and you are looking at ways to rebuild in the aftermath, some practical steps to consider are listed below;
Reflect on how you got into debt in the first place
This does not mean you are to blame or fault or cause you to beat yourself up for anything, what it means is to exercise in helping you to avoid bankruptcy or financial hardship in the near future. Sometimes we fall into hardship at no fault of our own. Illness, loss, and displacement can strike anyone at any time and are truly unfortunate situations. Other times, we help create our situation with unnecessary spending, poor budgeting, and not planning for the inevitable everyday emergencies. Take some time to honestly evaluate your financial past and see if there is anything you may change moving forward that can help you while rebuilding from bankruptcy.
Have a Plan
Now that you have cleared every debt and you have your whole future in front of you, the next thing for you is to sit down and map out a plan. The following steps should be included in your plans:
- Create an emergency fund. Can you pick up a side job and start soaking away a little bit at a time? Or can you sell some unused items and store the cash for a rainy day? Put this money where it is inconvenient to access it and forget about it. It is not for spending. We all know we will have a true emergency at some point. Let’s plan ahead and be prepared.
- Create a budget every month. Write down not only your recurring expenses but any one-time expenses you can expect for the month as well. This would include Birthdays, gifts, car maintenance, phone replacement, etc. If an expense is coming in the future but it is not quite here yet, start saving a little bit on a monthly basis to work towards that goal. By the time you need it, you will not have to go into debt to pay for the expense.
Find people who support you
Try as much as you can to look for people who have the ability to handle money well. These people do not have to be people that make lots of money. You can be able to build a great financial future for you and your family when you have good money management regardless of your salary. Learning from those who have been where you are and come out on top. Supports can be gotten in social groups, online communities, churches and anywhere that you feel comfortable and encouraged.
Remember, rebuilding is a slow process.
The worst is behind you. Make sure you pay your bills on time and make sure you stay away from racking up additional debt which can allow you the space to save money and rebuild your credit. The effect of the bankruptcy will lessen on your credit score as time goes on. Your focus should be on careful money management, having and sticking to a plan and finding support in different places. You can build the future you want and deserve even as you rise from bankruptcy.