Changing Your Spending Habits After Filing For Bankruptcy

December 18, 2009 by  Filed under: Bankruptcy 

There are many reasons that people file bankruptcy. Some do it because they lost their jobs or there was a devastating illness in the family. Many file for bankruptcy because they let their spending habits get out of control and their financial situation spiraled downward. Sometimes the person simply didn’t understand how to manage their money.

Filing bankruptcy has offered you a fresh start. In order to avoid damaging your new financial future, there are a few steps you need to take.

Form a Plan

One of the easiest ways to find yourself headed for bankruptcy is to consistently spend more than you make. You need to take charge of your money and educate yourself about how to manage it.

Your Minnesota bankruptcy attorney probably helped you prepare a budget that would help get you started on the right track, but you must remember that proper money management and avoiding getting over your head in debt is a lifetime commitment. It won’t work if you only stick to the plan for a few months after your bankruptcy is finalized. It is critical for you to keep close track of your spending habits and live within your means.

Form Good Financial Habits

Make a budget and look at it frequently. Does it need any adjustments? Has your insurance gone up or are you now spending more for transportation? Did you get a raise? Keep your budget up to date.

Make room in the budget for savings. You probably already know how quickly one unexpected financial blow can wreak havoc on a budget. If the car breaks down or you are off work for a few days with the flu you can easily become vulnerable to a financial crisis, especially if you have no money set aside. You also want to dedicate some of your savings towards a retirement fund.

Don’t let yourself be lured into old bad habits. Each time you make a purchase stop and ask yourself if the item is really necessary. If the answer is no, put it back unless you have already saved enough to buy it without breaking your budget. Do not give in to the temptation to put unnecessary items on a credit card.

Watch Out for Scams

Once you have filed bankruptcy don’t be surprised if you are inundated with offers to help you repair your damaged credit score or wipe out your bad credit history. In reality, the only one who can do that is you. Pay your bills on time each month and think carefully before you open any new lines of credit. Check out all offers thoroughly, searching the fine print for hidden fees or exorbitant interest rates.

It is possible to rebuild your credit score after a bankruptcy. Don’t hesitate to ask questions of your Minnesota bankruptcy lawyer. Besides knowing Minnesota bankruptcy law, she can also refer you to a financial advisor if you need help mapping out your financial future.

Make sure you talk to your Minnesota bankruptcy attorney for information on how you can best take control of your finances after bankruptcy. If he’s familiar with Minnesota bankruptcy law he’ll begin working with you to repair your credit even before your discharge is complete!

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