Bankruptcy is a very real possibility for anyone who may be overwhelmed by their finances. If this becomes a reality for you, there are 6 things you need to remember so you can recover quickly and effectively.

Nobody wants to make the tough decision to file for bankruptcy but, alas, sometimes these things happen. Despite the help it can provide perfectly responsible people struggling with financial difficulties, society tends to view bankruptcy as a negative thing, rather than the fresh start that it should be. Either way you look at it, though, if you have a bankruptcy on your record you will want to work quickly and diligently to recover from it.

First things first, you will want to take an honest evaluation of your situation. While you are probably feeling a little hopeless and despairing you will need to remain objective about what got you there in the first place. Your bankruptcy is probably the result of a combination of mistakes you may have made as well as some changing or stressful circumstances that were outside your control. Understanding what you can and cannot change is the first step to a solid financial recovery.

Secondly, it is important to remember that you are not alone on this journey. Five million people have filed bankruptcy since 2007 and it is quite likely that most of these people thought they were alone at one point. Bankruptcy affects people of all races and religions, all age groups, and people from various educational and professional backgrounds.

Obviously, you should also do everything you can to avoid predatory lenders and programs. Consumers who file bankruptcy are almost immediately met with invitations to open new accounts in order to help “rebuild” credit. A smart consumer needs to be fully aware of which programs are actually designed to help and which ones only want to help themselves. For example, some cards might offer “guaranteed credit” but they’ll also stick you with an extremely high interest rate. In addition to high-rate credit cards, you will also be susceptible to predatory “credit repair” offers that claim that can improve your credit report. Remember:

The only way to rebuild your credit is to actively pursue new credit accounts and then slowly build up a solid reputation over time. Indeed, this is the only way to start rebuilding your credit, which is also the fourth step to financial recovery. Get a new credit card relatively quickly, but one that is simple and easy to manage. If you cannot get approved or if you prefer to have something with a little more control, you might want to also consider a secured card. These cards require you to make a security deposit on your credit account which can act as insurance if you cannot make payments on your account. After about six months, though, you can start looking into things like a new auto loan or another kind of personal loan.

Fifth, you will want to establish a new, realistic budget. Part of this includes making your payment on time every month. Proper budgeting will not only ensure you keep a good credit score but also help you establish a solid financial base for the future. If you need help with this you should use professional budgeting software.

Finally you will want to stay on top of your credit score. Monitor your account to make sure that your information is always accurate. You can even sign up for a credit monitoring service to do this for you. Part of the reason for this is to ensure that your bankruptcy discharges appropriately once it has run its course.

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