Financial Recovery After Bankruptcy
A great burden is lifted when you receive a bankruptcy discharge. It is an opportunity to leave money problems and credit burdens behind as you take advantage of a fresh financial start. Many people in financial distress long to have this chance; so when it comes, making prudent decisions is critical to long-term financial health.
According to the National Bankruptcy Research Center, more than 1.5 million people filed for bankruptcy protection last year, the highest since the new laws took effect in 2005. As such, millions of Americans are looking forward to post bankruptcy success, and it is equally important to the nation’s economic recovery.
There are several steps debtors can take to maximize their opportunities. First, saving money and rebuilding credit are key parts of your recovery. More importantly, they can be done quickly. Credit card payments may have overwhelmed you before, but depositing a portion of those former payments into a savings account can help you greatly. You can rehabilitate your credit by applying for secured credit cards, or by taking advantage of small-balance cards that expand as you build more credit. Banks understand that you are trying to build a new, credit-worthy profile. Because of that, you are more likely to pay your bills on time.
Chances are that you stopped contributing to your 401k in order to make ends meet. Now that your debts are gone, it is critical to start putting money away again for retirement. This is especially vital if your employer has a matching program.
Further, having catastrophic health insurance is good way to avoid bankruptcy in the future, especially if you do not have comprehensive medical coverage through your employer. Medical debt is the most common reason for bankruptcy filings. Health plans can save you financially in the case of an accident or a sudden life threatening disease like cancer.
By following these steps, you will be well on your way to financial recovery. If you have questions about your rights after bankruptcy, an experienced attorney can advise you.