Recovering From Bankruptcy

The reasons why people have to file for bankruptcy are many. However, the most common and biggest reason for bankruptcy is financial mismanagement and wrong financial decisions taken by the person. This results in the aggravation of the problem resulting in filing for bankruptcy. Recovering from bankruptcy can be a slow process and predicting exactly how long it would take to recover from bankruptcy would be difficult, since it depends on how effectively a person implements the plan given to him.

Reasons for Bankruptcy Filing

• Excessive borrowing from banks and financial institutions without thinking of your repayment capacity
• Piling of huge debts due to multiple credit card usage
• Habit of postponing debt and interest payments
• Taking more loans to repay existing loans
• Wrong suggestions or financial advice from consultants

A person should consider the option of filing for bankruptcy only if he is unable to repay the debts under any circumstances. As far as possible, this option should be avoided as it affects your credit report greatly. Seeking bank credit after filing for bankruptcy is extremely difficult and even if that happens, you will be getting loans at very high rates of interest affecting your monthly cash flow.

For getting out of high debt situations, you can consider options such as selling of assets like properties, shares or using your fixed deposits to reduce the total outstanding amount. Bankruptcies can take a heavy toll on your financial health as under some norms, you are required to surrender your assets to the lenders which itself is a big setback for any person. So, my suggestion in this regard would be to fight the situation tactfully and get out of it to regain your days of prosperity.

Getting Good Credit Score after Bankruptcy

• Sit down and analyze the situation. Ask yourself what were the mistakes committed by you that lead you to file for bankruptcy. Tell yourself not to repeat the same mistakes again to restore credit score after bankruptcy
• First of all, you need to get a copy of your credit report from the concerned authorities and study it carefully. Make sure that there are no outstanding debts, and any errors in your credit report should be reported to the concerned authorities for timely action
• Make sure you have a steady income so that you become eligible for taking loans from banks again after bankruptcy. For this, you will have to find a stable job
• If you wish to avail of the credit card facility, get a secured credit card for yourself this time. The meaning of a secured credit card is that your savings account money will be taken as a collateral. If you can prove that you are earning a consistent income every month, then getting a secured credit card would not be difficult
• Pay your credit card bills on time and avoid late payments as they can attract a penalty and lead to a reduced credit score
• Have just one credit card and if you own multiple credit cards, convert the loan against them into a single card for easier repayment
• Seek professional help and counseling from credit counseling services for fast recovery post bankruptcy

Financial recovery from bankruptcy would not be a difficult job if you follow the above instructions. Though understanding how to recover from bankruptcy is easy, you will have to make sincere efforts to practically implement the suggestions. So, hoping that you will use the recommendations on recovering from bankruptcy seriously. I would like to sign off here. Good luck!