At the Law Office of Paul R. Idlas in Illinois, we help people like you file bankruptcy so as to get out from under overwhelming debt. But once your bankruptcy period ends, you may think the first thing you should do is reestablish your credit.
While important, getting a new credit card is not the first thing you should do in your post-bankruptcy life. Instead, you should do the following five things to establish and maintain your new financially responsible status.
1. Keep your bankruptcy paperwork
As Credit.com explains, the first thing you should do is not throw away your bankruptcy paperwork. At minimum, make sure you save your bankruptcy petition, your notice of filing and your discharge order in a safe place. You may need them later.
2. Get your credit reports
About three months after you complete bankruptcy, get your free credit report from all three major credit reporting agencies. Check each one carefully to make sure none still shows a debt the bankruptcy court discharged. Likewise make sure no former creditor assigned your account to a collection agency that remains on your report.
3. Start a budget
Everyone knows that budgets are no fun. Nevertheless, as a financially responsible adult, you should make one and then stick to it. Only when you know exactly what bills you must pay each month can you pay them and maybe even have a little left over.
4. Open a savings account
Some of your bills, of course, do not occur monthly. Start a savings account in which you put money to pay your quarterly, semi-annual and annual bills. Put as much money as possible into savings so you also have a cushion when emergencies arise.
5. Rebuild your credit
Once you do the first four things, then apply for your first post-bankruptcy credit card. In all likelihood you will only qualify for a prepaid one or one with a limited credit amount or higher than usual interest rate. Nevertheless, using such a card to make one or two small purchases each month and then pay them off immediately represents one of the best ways to reestablish your credit.
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