How To Get Back Into Credit After Bankruptcy

Sometimes people find themselves unable to take care of their current financial situation, so they choose to file for bankruptcy. While the process is difficult, it doesn’t have to be impossible. Here are some steps you can take in order to get back on track with your finances again after completing the process of filing for bankruptcy.”

Many people experience credit card debt or even bankruptcy without understanding what comes next. Some people may already know but don’t seem prepared for what happens afterward, others may never imagine that there ever could be a day when they do not have any credit cards or lines of credit open. The reasons for this may be any combination of, but here is a short list:

They don’t know how things work. They don’t know that they can get another card after their credit card is closed. They assume that credit cards and lines of credit will always be open to them and that they will never have to deal with having too little money in their accounts to pay the minimum payments on all the cards. They think that someone else will take care of everything and all they need to do is pay their bills and not worry about it. 

Even if they are aware of the end result of having too many cards open, they may not realize how much work it would be to get back to a position where they have no credit cards or lines of credit opened. It does take quite a bit of work to get back into the black again after declaring bankruptcy, but it’s not impossible. Below are some steps you can take in order to get back on track with your finances again after completing the process of filing for bankruptcy.

  1. After Filing Bankruptcy

After getting rid of all your credit cards, don’t get another one right away. It may be tempting, but don’t do it. Wait at least 6 months to a year before you do. If you get another one too soon, it may sink you back into the debt hole again. You need to use this time to pay off your debt load and work on repairing your credit history.

  1. Get an Employer Credit Card

If your employer offers credit cards for business expenses, then consider getting one but only if your company actually does not charge fees for using it (or if they do, apply for a card that has no fees). Otherwise, even if your employer offers an employee card, they may still charge you a fee for paying it off. If your employer charges a $5 per month phone line rental fee on their credit card, and you use it to pay your bills, they will still be charging you interest during the time that the account is in good standing. So when it comes time for you to pay them back when you stop using the card, it will be much more expensive than when you first started using the credit card.

  1. Pay Off Credit Card Bills in Full Every Month

Once you have an employer credit card, pay your bills off every month in full every month. Don’t let even one bill get past due. If something comes up and you can’t make it, contact the creditor right away. Discuss your options with them and work something out where you don’t get charged any extra fees, or at least none that are more costly than what having a cash advance would’ve cost. If you get hit with 6 bank fees for 6 bounced checks, your total could end up being higher than if you had simply taken out a cash advance on the credit card. 

  1. Set Up a Budget

Get a monthly budget going and make sure you stick to it. Make sure you know how much money comes in each month and how much money goes out each month. Figure out where the holes are in your budget, and fill them. If you’re spending too much on groceries or something else, then cut back or increase your income to match the budget’s needs. Also, figure out where there’s room to save so that you can put some extra money aside every month and pay off the credit card debt faster than if you just keep putting it on the card and paying only the minimum balance. 

  1. Get a Second Job

Another way you can get out of debt faster after bankruptcy is to pick up a second job. This isn’t always possible and can certainly be a challenge because it will mean less free time and added stress and frustration, but the extra income will be worth it in the long run if you’re worried about getting rid of your credit card debt as soon as possible. The more money you bring in each month, the faster your credit card debt will disappear. Just make sure that before you take on any extra work or choose to increase your hours at work that you don’t neglect your family duties and personal needs. 

  1. Pay off Credit Card Debt Faster

The first thing you need to do is figure out how you’re going to pay off your credit card debt faster. Look at your budget and figure out what you can do without that’s not absolutely necessary. If you can cut back on anything that’s not necessary, do it. Also, try to figure out any additional income each month that would be available to put towards paying off your credit card debt faster.

  1. Pay the Minimum Balance Due on Each Card Each Month

Once you know how much extra income or how many expenses you can cut back on, use the money to pay for the minimum balance due on each credit card each month so that none of them continue accruing interest charges. Whatever you don’t use to pay off the minimum balance due can go towards paying off your credit card debt faster.

  1. Look to Refinancing Your Credit Card Debt

Or if you don’t want to take on any more extra costs, then find out what refinancing opportunities are available for all the credit cards you currently have. You may be able to refinance your cards with a bank or other company that would give you the loan at a lower interest rate than your current ones, which will save you money in the long run because none of your accounts will be accruing interest charges anymore.

Conclusion- In conclusion, bankruptcy is not a process that should be taken lightly. It can have a lasting impact on your life and the life of your family after it’s over. But don’t let all of these unfortunate circumstances take you down one path when you could turn things around and find yourself in a better position in no time at all. If you’re feeling yourself sinking into the debt pit again, then get in touch with Canadian Cash Solutions for help, that we can get you out before it’s too late and you end up losing everything that matters to you most. 

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