How to Get a Fresh Start After Bankruptcy

Filing bankruptcy can be a difficult decision that is often unavoidable for some people. Rebuilding your credit after bankruptcy is a long road, but you must navigate it with grace and knowledge about the financial world. Getting a fresh start after bankruptcy is something many people struggle with but don't need to. Learn how to start anew after bankruptcy and begin rebuilding your financial life an responsible and satisfying way.

Instructions

Difficulty: Moderate

1. Get a copy of your credit report and ensure that you are familiar with everything on the report. Enroll in a credit monitoring program or at least obtain a copy of your credit reports every 6 months to keep track of what is happening with your credit.
2. Read the overview your bankruptcy terms so you are fully aware of how long your bankruptcy status will stay on your report. Most bankruptcies stay active on people's credit reports for five to seven years. Pay all of your bills on time. For creditors who were not included on your bankruptcy settlement, make arrangements to pay them off in a reasonable amount of time to prevent further credit damage.
3. Join a credit union to rebuild your credit. Then keep your account clean and reasonably full to avoid adverse credit reaction. Make a major purchase such as a car or a house within two years of filing for bankruptcy (if you can afford it) and make the payments on time. Shop for viable interest rates, but be prepared to pay a higher rate for your purchases because of your credit.
4. Budget your money and steer clear of multiple credit accounts that you are unsure of whether you can pay or not. Apply for a credit card with a relatively low credit limit and make smallish purchases in order to rebuild your credit history. Always pay your credit card payment on time. Preferably do not pay them in full, since keeping your credit lines open builds your creditworthiness.
5. Start a retirement fund and a savings account. Contribute to those accounts on a regular basis. Gradually open up new but small balance accounts and establish a good credit record to show that you are a responsible and credit worthy consumer.

Tips & Warnings

• Monitor your interest payments and renegotiate interest rates after having credit cards after a while; many companies will be flexible once you have established yourself.
• You may need a cosigner on things like homes, school loans or cars. However many cosigning programs will allow the cosigner to relinquish responsibility after a certain amount of time on the loan period, which eases worries about default for potential cosigners.
• Get a credit adviser to help you make good decisions on your credit; many websites offer this service when enrolling in credit monitoring programs.
• Do not fall behind on payments or bite off more than you can chew. Never spend beyond your limits.