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Is it possible to recover your finances following a bankruptcy?

Financial problems can be some of the most stressful hurdles to overcome, especially when your troubles involve mounting debts with shrinking deadlines. If you have found yourself considering filing for bankruptcy in Ohio. 

You may be wondering how bankruptcy could impact your financial situation in the long-term. While it is true that bankruptcy will show up on your creditor reports, it should not prevent you from being able to get loans or mortgages in the future. The key is how you manager your finances once the bankruptcy is complete.

Get started while your bankruptcy is pending

The best way to get a head start on rebuilding your credit is to establish good habits while the bankruptcy is pending. Preparing a budget and sticking to that budget is critical to your long-term success. Practicing while your bankruptcy is pending will help you develop the skills you need once your bankruptcy is complete.

Watch out for overspending and other behaviors that could derail you in your life after bankruptcy. Nip bad habits in the bud and you will have a solid foundation for your new life.

Tips for rebuilding your credit after bankruptcy

According to Money Crashers, one of the most important things to remember as you prepare to rebuild your wealth is that this process will take effort. Throughout the process, be patient and celebrate each small accomplishment.

Stick to your budget. During your bankruptcy, you should have created a new budget that reflects your spending needs for required necessities, but also allot some funds to an emergency account that you can pull from if you run into a tough time.

Keep an emergency fund. While it may be tempting, resist the urge to tap into your emergency fund for vacations or other non-necessary items. This fund is your protection against the unexpected.

Do not carry any debt

There are many credit card companies that cater to people who have recently filed bankruptcy. While these cards can be helpful when rebuilding your credit, they can also be a slippery slope as well. These credit cards often have high interest rates. It is essential that you do not use them unless you can pay off the balance immediately. You want to avoid carrying a balance on any card. 

Pay all of your bills on time or early

With your budget in place, you should be able to stay current on your bills. Keeping a low debt to income ratio will be critical to helping you rebuild your credit.

Sticking to these tips requires discipline and diligence, but it will pay huge rewards. Once you get used to this new way of living, it will soon seem like second nature.

The information in this article is intended for educational purposes only and should not be taken as legal advice. 

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