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Living well after Chapter 7 bankruptcy

The paperwork is processed, you’ve met with your creditors, the liquidation has come through and you are on your way to a newly debt-free life. In a way, this is where the real challenge begins. You will need to approach day-to-day life with new spending habits to avoid what got you into debt in the first place.

There are a few simple steps anyone can take to keep their finances stable and rebuild their credit at the same time. By sticking to these principles, you will find yourself living well and enjoying your debt-free life to the fullest within a few months.

Create a budget

As we discussed in a recent post on how to not overspend during the holidays, having a budget and sticking to it is vital to financial success. Take some time and track every cent you spend, then compile it into categories. How does it compare to your income? What can you eliminate? Some simple math and personal cuts are the key to having a surplus each month.

Consider a secured credit card

A secured credit card is a way for people with less-than-great credit scores to get a credit card and begin rebuilding their credit.

These unique cards are backed by a cash deposit you put down upon being approved. The credit limit is usually the same as the deposit, meaning if you put down $200, you will have a new credit card worth $200. If you make your payments you have a normal credit card, if you miss payments the lender takes your deposit.

Know where the debt came from

Debt comes from a multitude of different places; medical bills, emergency expenses, shopping compulsion, bad investments, the list goes on. Take a hard look at what got you into financial straits to begin with and consider what changes you can make to keep yourself from making the same mistakes.

Learn from your experience

As with many things in life, your attitude after bankruptcy is pivotal to your future success. Individuals who look at bankruptcy as another failure in a long line of mistakes are not likely to bounce back as effectively as people who look at the process as a necessary tool to get their life back on track.

Overcoming debt is a challenging experience, both physically and emotionally. You put in the work for a fresh start, don’t let it go to waste.

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