Life after Filing Chapter 7 or Chapter 13 Bankruptcy

Filing Chapter 7 bankruptcy or Chapter 13 bankruptcy is an emotionally charged life event.  The recovery process is equally emotional and should be thought of as a marathon and not a sprint.  Your bankruptcy attorney has no doubt detailed the steps taken throughout the bankruptcy process but now that you’re done you may wonder what’s next.  We will briefly detail steps to bankruptcy recovery in the post below.

  • Allow time for the emotional recovery.
  • Stable employment
  • Pay your bills
  • Save your money
  • Rebuild your credit

Filing Chapter 7 bankruptcy, life after bankruptcy

Filing Chapter 7 or Chapter 13 Bankruptcy Yourself

As you begin the journey of recovering from Chapter 13 or Chapter 7 bankruptcy you must first acknowledge the process you have accomplished and goals you had when you first decided to file bankruptcy.  Trust that you are not alone and that if you follow the advised plan, the goals you originally laid out will be achieved.  Just as your bankruptcy attorney guided you through the filing process they will be able to provide guidance through the recovery process. Your bankruptcy counsel can be thought of as your first support member, but it is wise to also have others that you can count on during this journey.  Approach each recovery step with a level head and look toward the future instead of back at your past.

A large percentage of people file Chapter 7 or 13 bankruptcies due to unemployment, if that is the case you must diligently search and secure a job.  If you are currently employed it is imperative to continue building on your employment history.  Maintaining stable employment will allow you to pay your monthly expenses and begin the recovery process.  Also, the longer your stable work history the more responsible you will appear to creditors.

The next important recovery step is creating a budget and living within your means.  While you may have never used a budget before this step will allow you to understand your finances and avoid financial disaster.  To create your budget you should first begin by gathering your monthly expenses and your monthly income.  Compare the two numbers and determine if you are living within your means and adjust any unnecessary expenses.  Filing Chapter 7 or 13 bankruptcies will have a seriously negative effect on your credit history and only time and consistently paying your bills will repair it.  So it is imperative to keep current on all your monthly expenses.

Now that you have a budget and have developed a routine to pay your bills timely, you need to explore avenues that allow you to build an emergency fund.  You should examine your budget and determine areas where you can save.  Creating an emergency fund is good for multiple reasons.  First, it gives you a cushion should an unexpected financial need come up and second, it shows creditors you’re living a financially stable lifestyle.

The last step in the bankruptcy repair marathon involves obtaining and using new credit.  Shortly, you will begin receiving advertisements for credits cards with higher interest rates or for a secured line of credit.  Review and compare the various offers and select the one that you feel most comfortable with.  Once you open a line of credit, use it wisely, and in a very limited fashion.  At this stage in the recovery process you should only have one credit card and should pay that line of credit off each month.  This will allow you to gain the trust of the creditor and will assist in raising your credit score.

About Marc Aaron Goldbach

Marc Aaron Goldbach has worked tirelessly to develop a successful bankruptcy and civil law practice for clients located throughout Los Angeles County. Mr. Goldbach at GoldBach Law Group have represented a wide array of small businesses and individuals with 100% client success rate. Mr. Goldbach is always available to answer questions and willing to guide you through the entire legal process.
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