Surviving a Bankruptcy
So you’ve recently filed for bankruptcy or you’re considering filing, what does this mean for you? There are a few ways of looking at filing for Chapter 7 or Chapter 13 bankruptcy; the glass is half full, or half empty, or maybe a little of both. On one end of the spectrum you may feel like this is the end of the world because you have no idea where to begin.
You feel like your credit is shot and now you have to start all over again, but on the other end of the spectrum you may feel a sense of relief, and like a huge weight has been lifted. And now that, that weight has been lifted, you can now start over fresh with a new beginning. Looking at the glass as half full is definitely how you want to approach the survival of bankruptcy.
You’re Not Alone – Effects of Bankruptcy
First of all, remember that you’re not alone, so let go of any guilt or shame that often times comes along with filing for bankruptcy. Look at this as a bright opportunity to start over. Many people file for bankruptcy every day, and many people survive bankruptcy, so can you. But where do you begin? First, we’ll start with the effects of bankruptcy and go from there.
Due to the fact that bankruptcy records are considered public information, keeping it private may be difficult. One way to avoid having your employer involved in this process, which may be embarrassing, is that if you don’t already have direct deposit of your payroll check then you should begin direct depositing your checks now. You can then have your bankruptcy payments directly withdrawn the same day that you’re paid from your bank account instead of wage garnishment.
Another negative effect is that embarrassing moment when someone is reviewing your credit report for one reason or another. You can make that process less embarrassing by adding a note to your credit report of 100 words or less as to why you had to file for bankruptcy, especially if you had a particularly compelling reason to do so. And with the filing of bankruptcy comes an increase in insurance rates, as many insurance companies base your insurances rates partially on your credit report.
Reestablishing Your Credit – A New Lifestyle
Many people that file for bankruptcy often times are living beyond their means, which puts them in a hole. If that was the case for you, then now is the time to adopt a new lifestyle and live within your means so you don’t end up in this same situation again in the future. Living within your means may mean really skimming down on frivolous things, as well as not so frivolous things such as living expenses and groceries.
You should get used to living on cash for a while, until you’re ready to start rebuilding credit. Make sure to always pay your bills on time and when you are ready to work with “credit,” then start with a secured credit card. There are no rules as to how long it takes to reestablish your credit. This will all depend on you and how quickly you act to begin rebuilding. There are many people who believe that it is actually easier to rebuild credit after a bankruptcy in comparison to someone who has not filed and wishes to reestablish credit.
The Future of Your Credit – The Future is Bright
As hard as bankruptcy may feel right now, always remember that time heals all. There is a light at the end of the tunnel. Even though it takes 10 years for bankruptcy to come off your credit report, you can spend that next 10 years rebuilding your credit. And the closer you get to that 10 year point, the lower you’ll watch your rates go down and the better the deals you’ll get when you apply for new credit or an auto loan as you steadily rebuild and start over. You should begin to see a noticeable difference in the reestablishing of your credit about 18-to-30 months after bankruptcy.