Filing for bankruptcy can be a stressful time. While one chapter may be closing, you might worry about a new set of problems that could affect your financial future. How will this impact your credit score? How will this impact your future investments? And most importantly, how can you avoid getting in the same situation again? In this guide, we'll go through a few strategies to learn how to avoid debt after filing for bankruptcy. With the right planning and knowledge, you can set yourself up for brighter days ahead!
1. Find Out What Went Wrong
It's good to put the past behind you, but when it comes to your finances, it's important to come to terms with what went wrong in the first place. Think of performing a financial autopsy to see what decisions led to filing bankruptcy. What could you have done to prevent it? Maybe you need to learn how to reduce credit card debt, maybe you needed a larger rainy day fund, maybe you need to brush up on your budget. Identifying the key factors that led to bankruptcy can help you find a way to resolve them well before you get in the red.
2. Learn How to Budget
If you want to live within your means, you need to strategize. This means setting a realistic budget - and sticking to it! You'll need to be honest with yourself. Don't punish yourself with a skimpy budget that you'll never keep, but don't forget that you'll need to commit to some compromises. Your top priority is getting bills under control every month. Bills related to your health, safety, and security are the most important. See if you can cut back on non-essentials, like shopping and subscription services. However, don't forget to set a little bit aside for an emergency fund.