Bankruptcy and Budgeting how to Start over

When you file for bankruptcy, this gives you a fresh start regarding your debt and credit. It is a way of starting over in itself. However, it is also extremely important that you set a budget to work from, as you will not be able to take this drastic step again for many years. Here are some of the ways that you can start over, and actually end up in better financial shape than you ever were before.

Your first step after filing bankruptcy is to take stock of the bills that you still have. There may have been a couple of things that you left out of your bankruptcy. There are other bills that just don’t go away no matter what you do, including such things as child support, student loans, back taxes, and your monthly rent and utility bills. Make sure that you set a budget so that all of these things are coming out first.

Your next step will be to apply for a secured credit card. There are some banks that will not allow you to do this until six months after your bankruptcy is final, but if that’s the case, just wait the six months, and get the credit card then. Use this card to pay for things that you already have the money for, and then pay it off as the bill comes each month. This will help you to re-establish your credit rating.

When it comes to car loans and the like, they do help you to increase your credit rating, but you will be far better off if you pay for a car in full. The reasoning for this is that you are likely to pay at least twice what the car is worth by the time you are done making payments. If you do choose to have a car loan, at least make a down payment that is high enough to offset the drop in the value of the car as you drive it off the lot.

Home loans may also be harder to get after a bankruptcy. In the case of a home loan, just keep renting and putting away money toward a down payment on a home until your credit rating is high enough and you have a high enough down payment to buy your home. This is ultimately the main reason for rebuilding your credit rating in the first place.

Starting over after a bankruptcy is much easier than the process of going through it. It is a period where you will have to be careful not to buy anything that you cannot afford to pay cash for. You will have to make sure every bill is paid in full and on time. In the long run, however, you will be much better off as long as you are careful from here on out.