People file for bankruptcy for a number of reasons. Some have valid ones such as medical emergencies that put them in too much debt. Others just don’t know how to handle their finances. Then, some invested in a business that flunked. No matter the reason, filing for Chapter 7 or 11 is a huge step to make. You need lawyers and financial counselors to guide you through it. In fact, the court will mandate that you attend hearings and seminars on how to handle your finances after declaring yourself bankrupt.
Life after bankruptcy is not a walk in the park. You will have difficulties applying for loans and owning properties because of your bad credit history. Although there is a way to reverse your bad history and upgrade your credit score, it will take time; years, in fact. But what happens now when you want to get back on track? What will you do if you want to own a business, home, or car?
Find Employment and Do Side Jobs
You have to find a stable job that pays well. If it doesn’t pay well enough for your monthly needs, then find side jobs. You can do these after your shift or on the weekends when you do not have your regular work. A side job will augment your income, empower you to pay off your debts, and maybe even save for future expenses so you will not have debts again.
You can start a home-based business. Entrepreneurs don’t need thousands of dollars to start a home-based venture. No bank might lend you money. Even your friends won’t. So find a business that will not require you to shell out more than you can. Start small so you don’t have to borrow money from anyone.
Look for Bad Credit Loans
Of course, you will need a car to get around. You can even use it to offer ride-sharing services and those pay well enough if you do them regularly. You will not be eligible for a car loan, but you can check some no-credit-check car lots in your area. These dealerships can provide a loan for people like you who have a bad credit history. As long as you sign the paper to pay off the minimum amount of the loan every month, you can drive your new car in just seconds.
However, if you don’t pay off the principal amount of the loan, this will start a debt that might snowball again later on. Commit to yourself that you’re going to prioritize paying off the loan over any luxury you think you deserve right now. All the money that you earn should go toward settling whatever debt you have.
Downsize Your Lifestyle
Why did you get into too much debt, anyway? Are you traveling even when you don’t have the money? Are you spending too much on dining out with friends? Perhaps, you’re living a lifestyle that your salary cannot afford. Forget about the pressure of social media for a while. Ask yourself this question: how much am I earning, and what kind of lifestyle can I afford?
Once you have an understanding of how much you can spend on an apartment, for example, then you will be ready to downsize your lifestyle. Instead of living in an expensive one-bedroom apartment, why not live in a studio-type pad? Is the space not enough for you? Then, use that as motivation to eventually earn well enough that you can afford a better apartment.
Give Yourself Goals
Life after declaring bankruptcy usually gets better around the sixth year. Most people, by then, would have paid off their loans already though that still depends on how bad your finances were in the first place. Set goals for yourself. If you can work two jobs, do that so you can pay off most of your debts in a shorter period.
How much time do you need to pay off the remaining debts? Be realistic but also strive to do more so you can get back on your feet again. It is one thing to declare bankruptcy, but it’s another thing entirely not to work to get out of the same loop.
Filing for bankruptcy is not the end of the world. It shouldn’t be for you. It’s a chance to start anew, to handle things better, and to manage your finances in a way that will get you out of your predicament. Many people are embarrassed about their failure to handle money well, but if you think that way, you aren’t giving yourself a chance to try again and succeed this time.
