How to Recover From a Bankruptcy
PHOENIX, AZ--(Marketwire - 06/15/2011) It's not just happening to you. If you've filed for bankruptcy recently, you're among thousands of Americans who file each month in the U.S. "More than 1.5 million Americans filed for personal bankruptcy last year, according to the National Bankruptcy Research Center," says Kristy Welsh. "That's the highest level since 2005."
The question becomes: once you're through the rigors of bankruptcy court, what happens next? "You can start your recovery the day after you receive your discharge papers," says Welsh. "Rebuilding credit and getting a little money saved can begin immediately." Here are the steps Welsh recommends.
- Those credit card payments you no longer have to make — start putting them in the bank. Most likely, you've wiped out credit card debt in your bankruptcy. You can take at least a portion of what you would have been paying on those cards and put them into savings.
- If you have a retirement saving plan like a 401(k), especially if there is a matching program, start contributing. Retirement is expensive. Even a little money put away each month can add up over the long term.
- Get catastrophic health insurance if you don't have any kind of medical coverage. The number one reason for filing bankruptcy in the U.S. is medical bills. A health plan with a high deductible is often very affordable and can save you financially in the case of an accident or a sudden life threatening disease like cancer. Protect your new savings plan with this type of insurance.
- Apply for secured credit cards. Welsh suggests trying your local bank first. If you're having difficulty finding one, however, see Creditinfocenter's recommended secured credit card list.
- Check your credit report to make sure it has been updated to properly show which debts were included in your bankruptcy. You don't want to have any discharged debts show an open balance.
CreditInfocenter.com is a one-stop destination for consumers looking for free advice and tips on how to repair credit and get out of debt. CreditInfocenter.com founder Kristy Welsh is also the author of Good Credit Is Sexy, a tongue-in-cheek guide to managing your credit.