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3 tips to help you find financial freedom during bankruptcy

On Behalf of | Apr 18, 2019 | Firm News | 0 comments

There are many reasons why individuals turn to bankruptcy to address the debts plaguing them. You may be unable to work because of a sudden illness and cannot recover financially because of the lack of income and influx of bills. Or, maybe your credit card bills got out of hand and you can no longer afford to pay them. In cases that involve high debt, bankruptcy can help you to regain control.

Once you have decided that you are going to file, you need to develop a plan to live through the bankruptcy and fine-tune your plan for avoiding another filing in the future. While you do need to customize your plan to fit your life in Colorado, some tips can help just about anyone who needs to file for bankruptcy protection.

Set your budget

You need to set a budget that assigns a place for every dollar you make. If you file a Chapter 13 bankruptcy, your payment to the bankruptcy trustee has to be a priority. You also need to include the money to pay rent or mortgage, utilities and any other necessary bills. You likely won’t have much left over once you pay these, but make sure you have a plan for what is left.

Start saving

Even though you might not be able to save a lot, starting to save any amount is going to be beneficial. Start working on the plan that will enable you to have an emergency fund that can cover unexpected expenses.

Set small goals you can attain so that you feel the momentum of making them happen. Your ultimate goal should be to have enough to cover at least three to six months’ worth of expenses in case you are unable to work or find yourself in a financial bind.

Get back into credit slowly

While you can’t embark on rebuilding your credit while your bankruptcy case is still in motion, you should plan for starting this journey when it is over. You will likely need to get a secured card to start with since not many creditors will extend credit to someone who has recently filed bankruptcy. Additionally, make sure you are paying other bills on time.

During your bankruptcy, you will have certain education requirements to meet. You can learn tips that will help, so make sure that you pay close attention. Your financial freedom might depend on it.