Six Tips to Avoiding Financial Problems After Your Bankruptcy

As part of every bankruptcy filing you have to take two credit counseling courses. The purpose is simple. Bankruptcy Court doesn’t want to see you again. But there are also some practical things that you should do so that you don’t find yourself back in financial difficulty. They are:

  • Create a spending budget.

While budgets may be “old school” they are a good idea. Sit down with your pay stub and think about what your monthly gross earnings are. Look at your net, that’s the real number, that’s what you can spend.

Then take several months worth of receipts and divide them into categories such as mortgage payments, gas, food, clothing, entertainment. Get a sense of how much you are spending for each one of these categories every month. Do you have any money left over at the end of the month? If not, there are some real hard decisions that need to be made. A little self imposed discipline is better than finding yourself in financial difficulty.Financial Problems after Bankruptcy So, create a spending budget and, stick to it. Give yourself a “reward” every month by setting aside just a little fun money.

  • Save 10% of your income. Bad things happen to good people, you know that. If you save 10% of your income in a savings account, you will be building up a fund for financial difficulties. And, even better yet, your sense of accomplishment will grow as you seeing that you are saving money.
  • Getting insurance. Yes, I know that getting insurance can be very expensive, but it may be a lifesaver not only medically but financially. If you get sick and are unable to work, or a family member is ill, health insurance can make the difference between you and bankruptcy. When you look at your paycheck did you see the deduction for group insurance? If not, at your next open enrollment, you should enroll you and your family in a group insurance policy. Will it be expensive? Yes. Should that discourage you from getting insurance? No. You’ll be one more mess away from another round of financial difficulties.

You went through bankruptcy to get a fresh financial start and we congratulate you on that decision. Now let’s keep on the path to financial health.

  • Reconcile your bank account. As part of your budget, you should also be reconciling your bank account every month. Why? You want to avoid bouncing checks or even over drawing your account or debit card. Tell you bank that there are no more over drafts.

Balancing your checking account every month will tell you how well you are doing in sticking to your budget.

Your budget shouldn’t be like dieting, it should be a life long habit.

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