How to Recover from Chapter 13 Bankruptcy
The reasons to file for chapter 13 bankruptcy can be very situational. Chapter 13 bankruptcy, also known as “Wage Earner’s Bankruptcy,” enables individuals to restructure their payments within a three to five year period while keeping their assets. Unlike other bankruptcies, chapter 13 provides a plan to repay all or a significant portion of the debt.
So, what comes next? What can you expect in the future? You will likely have many questions about life after chapter 13 bankruptcy. Today, Groce and DeArmon help to answer some of these important questions to make your situation easier.
Rebuilding Your Credit
If you are filing for bankruptcy, it is likely that you have dealt with debt issues which affected your credit score. A first step in the rebuilding process should be applying for a secured credit card. In order to use the card, you need to deposit money to ensure initial payment. Secured cards are a great way to rebuild credit and become more spending-conscious while also being transparent with the credit issuer.
Groce and DeArmon Quick Tip: It can often be difficult to get approval for an unsecured credit card after bankruptcy. Start with a secured credit card and improve your credit score!
Staying Up to Date on Reports
It will be beneficial to stay up to date on your financial reports during the next three to five years. There can be mistakes hidden in credit reports that may go unnoticed without a careful eye. Life after chapter 13 bankruptcy needs to be very organized and cautious. By reviewing monthly credit reports, you can see what your spending habits are and determine what actions you should take to prevent overindulgence in unwanted categories.
You will need to limit some areas in your spending in order to prevent future problems. Make a detailed budget that shows your priorities and stick to this budget. If you are filing chapter 13 bankruptcy due to medical expenses, a job loss, or for other reasons, make sure to prioritize spending in areas that are necessary for daily life in your situation. Budget in an emergency fund just in case a situation arises without warning. Often times, not being prepared for an emergency can be the tipping point back into debt.
Seek Professional Help from Groce & DeArmon
Groce and DeArmon offers resources to help individuals post-bankruptcy. We are able to provide advice for how to recover from chapter 13 bankruptcy, and we have specialists that can answer your questions. We wish you the best in your financial journey, and we want to assist you to the best of our abilities. Contact Groce and DeArmon, P.C. to talk to a bankruptcy attorney or visit our website to learn more about the services we offer.