Filing for bankruptcy is a big step that can change your financial future significantly. Knowing what steps to take after you get through the bankruptcy process can help you build your credit back, continue making payments, and avoid developing some of the same problems that resulted in a new filing for bankruptcy. Many people have recovered after bankruptcy and enjoyed a healthy financial future by taking the following steps. 

Monitor Your Credit Report

Once your bankruptcy is over, you may be concerned about your credit score. You can access a free credit report from AnnualCreditReport.com and compare activity from the three main credit bureaus – Experian, Equifax, and Transunion. Checking your credit report can help you ensure that all of the debt discharged in your bankruptcy is noted on the report. If the debt is still on your credit report that was discharged in the bankruptcy, you should dispute the line item with your creditor.

Organize and Save Your Bankruptcy Paperwork

Bankruptcy can involve a mountain of paperwork. After your bankruptcy, we recommend organizing and saving your bankruptcy paperwork. Your bankruptcy petition will be around 50 pages, and it will include your detailed financial information. You should also save your notice of bankruptcy filing that you received from the court, which states that deadlines affect your case. Finally, the court should have sent you a copy of your discharge order that the bankruptcy judge entered. You may need these documents later, as some lenders want to see a copy of your bankruptcy paperwork before they extend you new credit, especially with mortgage loans. 

Avoid Being Scammed by Credit-Repair Companies

It can be tempting to work with a credit repair company to improve your credit score. However, doing so can hurt you financially. Many credit repair companies are scam artists who will take advantage of you and charge you extremely high interest. Some of the signs that you may be scammed by a credit repair company include the following:

• You pay upfront for credit repair before the company performs any service
•  The company does not tell you your rights
• The company advises you to dispute information that is accurate but negative on your credit report
• The company asks that you do not contact credit reporting agencies
• The company tells you to lie on your application for credit or alone
• The company claims it can create a new identity for you for free

Some of these practices are illegal, so if you follow through on them, you could face criminal charges.

Keep a Stable Job and Residence

Consistency is essential after your bankruptcy has been finalized. Try to keep a stable job and a consistent home residence to show creditors that you are reliable. Many creditors will consider your employment history and income before providing you with credit accounts. They will want to know whether you make enough money to repay your loan. Having gaps on your resume can make you seem like a risky borrower. Living at the same residence for over a year can show that you are more reliable, especially if you have been paying your rent or mortgage consistently and on time. 

Check Your Credit Reports Regularly

Checking your credit report once after your bankruptcy has been finalized is not enough. You should check your credit reports regularly. You may want to wait three to six months after your bankruptcy case has been finalized before you begin a cycle of reviewing your credit reports. You want to ensure that all the discharged debt from your bankruptcy has been reported with a zero balance so it does not count against your credit score. You may want to check your score every few months and ensure everything is accurate. Bankruptcies can stay on your credit report for up to 10 years, so monitoring how your bankruptcy impacts your credit score is crucial.

Prepare a Budget and Review it Regularly

Now that your debt has been discharged, it is a perfect time to begin budgeting and saving. By creating a basic budget to understand your expenses and reviewing where you stand, we can help you pay your bills on time and save money. The bankruptcy process can help show us that credit is a part of modern life, but it comes with a huge responsibility. Once you have created a budget, you can practice being disciplined and staying within your budget. You can also begin creating goals for the future.

Start Saving for an Emergency Fund

After you have established your budget, you can begin saving your emergency fund. As your emergency fund grows, you may want to set aside some of that money for a retirement fund or college tuition savings account. Having an emergency fund will help you if you experience a financial emergency. Instead of using credit cards, you can use the money in your emergency fund.

Consider Taking Out New Credit

You may be feeling like you do not want to take out credit cards again after going through bankruptcy. It is important that you not go overboard with credit cards, but strategically taking out some debt can help you rebuild your credit score. You may want to start with a credit card with a small credit limit. Monitor your charges carefully and budget to pay more than your monthly minimum. Ideally, you should pay the total amount every month.

Make Payments on Time

Once your debt has been discharged, you should focus on making all your payments on time. If you make payments on time for months and eventually years, your credit score will increase more quickly than if you miss payments.

Gradually Increase Your Credit Mix

As time goes on, and you can budget and pay the monthly minimum or more on your credit card, you may want to start increasing your credit mix. Taking out another loan or another credit card can help show the credit bureau that you can handle that responsibly.