Missouri Illinois Bankruptcy Attorney Foreclosure Reposession of Car

How We Can Help you

Bankruptcy Blog

Library

Getting Back on Track After Bankruptcy

The Castle Law Group is a law firm that is dedicated to helping citizens in the St. Louis area get through the bankruptcy process. It is our goal to help our clients through bankruptcy while still being able to keep as much of their property as possible. If you or a loved one is deep in debt and cannot see any way out, contact the Castle Law Group for a free legal consultation today.

So you’ve declared bankruptcy. What do you do now? What will your life be like? Is it something to hang your head in shame over? Will it follow you for the rest of your life? Can you repair your credit? Will you be able to buy a home at some point in the future? Or get a car loan? What do you do?

These are all perfectly valid questions, and while each individual situation is different, we can tell you that there are a few actions you can take to help you re-establish yourself in a quicker fashion.

Step One: Live a Spartan Life. You know those shows on the entertainment networks in which you are shown the lifestyles and mansions of singers and athletes. That isn’t you anymore. In fact, if you filed a Chapter 13, your lifestyle will be regulated for you. You will be allowed a certain amount of your income for your living expenses, and the rest will be divided by a trustee among your creditors for a pre-determined period of time. So whether you like it or not, you will have to take a real look as to the sort of life you will be living. And if you filed a Chapter 7, which is where your debts are effectively erased, the bankruptcy stays on your credit report for ten years. What that means in some cases is that you have to get used to living on cash, because getting a loan or line of credit will not be as easy as it once was at least for a year or so. Get used to keeping the things that you have. Rethink a few things. Do you need ten thousand channels? Do you need a new car when your old one runs just fine? If you go through your expenses in a given month, it isn’t hard to determine what a “necessity” is and what isn’t.

Step Two: Build Your Own Parachute. Not having access to a line of credit means that you need to get serious about your finances. Step one is making sure that you have the cash on hand to handle any emergencies. What happens if you lose your job? What happens if your car breaks down? What happens if you get sick and the insurance company denies your claim? If you don’t have a significant amount of money in a savings account, you will be in serious trouble. A good rule of thumb is to have at least two or three month’s salary in a savings account. If you don’t have that together, you better get started, because you won’t have access to any credit until your bankruptcy is discharged.

Step Three: How Do You Get Credit if You Can’t Get Credit? This is one of the biggest hurdles that exist for anyone getting past a bankruptcy. This can be very difficult if you had to declare bankruptcy due to financial mismanagement. The first thing you should do is pay any utility or phone bills that you have religiously. If you can, pay them the day they arrive in the mail. Next, shop around for a secured credit card. This is different from a typical credit card in that you put the money down for the amount that you can charge. In other words, you are your own line of credit. Establish a card, and then use it to buy one thing a month and only one thing. Maybe a movie. Maybe an oil change. Nothing huge. Just enough for you to be able to easily re-establish the credit limit back to the pre-determined collateral amount, which you should do religiously.

Step Four: Be Honest. Nobody is proud of having to file for bankruptcy. But you should consider that there are different reasons for bankruptcy. Some people think that “bankruptcy” means “spent like an idiot,” but people also have to declare bankruptcy after a divorce, a business failure, or a serious injury or illness. You can annotate this on your credit report in a hundred words or less. While this might not matter if you are applying for a car loan, it could make all the difference in the world when it comes to things like getting a job or applying for insurance.

These are only some of the steps that you can and should take to help rebuild your life after bankruptcy. If you or a loved one is considering filing for bankruptcy in the St. Louis area, contact the Castle Law Office for a free legal consultation today.

Got A Question?

News

FAQs

Videos