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Life After Bankruptcy

Ellenville, New York Area Bankruptcy Lawyers Examine Life After Bankruptcy

Life after a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy can be a good one, providing that lessons have been learned from past mistakes, and appropriate lifestyle modifications and/or corrections have been put into practice. You have your “fresh start” with most, if not all, all of your troublesome debt eliminated. You are no longer being harassed by constant creditor calls, and that portion of your income previously devoted to paying credit cards and consolidation loans can now be devoted to your true cost of living expenses. You are now on your way to rebuilding your financial future—at least in theory. As wonderful and freeing as a Bankruptcy Discharge can be, it is not a guarantee of future prosperity, and it does not insulate you in any way from the vagaries of life, such as future job loss, illness, etc. That being said, clients at Hayward, Parker & O’Leary from all over the Hudson Valley Region, including southern Ulster County communities such as Ellenville and New Paltz, frequently solicit advice about how to revamp their money management skills so that they can plan for, and obtain, a better financial future.

It is critical that you avoid the mistakes that drove you to bankruptcy in the first place. What follows are some thoughts, a few that are obvious and self-explanatory and others that are less so, designed to assist you going forward down the road to your financial future:

  • Pay your bills on time: A large portion of your credit score is driven by the timeliness of your bill payments.
  • Find a good paying job and keep it: You need sufficient income to finance your life. To achieve this you may need a better job, or even a second one (admittedly, not an easy task in a bad economy). If you are unable to work, be sure to explore all available government programs to secure whatever possible benefits might be out there. The government will not come looking for you (unless you owe them taxes), so do not be afraid to contact them and see what happens.
  • Rebuild your credit, wisely: Once your income is stable and your bill payment has become reliable, apply for a low limit credit and use it only for small purchases. Repay each purchase in full over a two month period, repaying half the first month and the remaining balance the second month. Having a small balance that you effectively manage will improve your credit rating, but do not lose sight of the fact that it was possibly / probably credit card usage that got you into trouble in the first place. Avoid the slippery slope that can lead back down the road to indebtedness.
  • Understand the difference between “wants” and “needs”: Spend your money wisely. Do not make extravagant or frivolous purchases. You may “want” an exotic and expensive late model foreign roadster (ie., Porsche) for “show”, but all you really “need” is an economical, functional car (ie., Ford) to get you back and forth to work, etc.
  • Create a budget, and live by it: It is easier to stay on top of your finances if you are not spending more than you are making.
  • Join a credit union: If you need a car loan (for a Ford, not a Porsche), their lending criteria are generally less formulaic, and more accommodating, than the traditional banks.
  • Avoid credit repair scams: There is nothing that they can do (legally) that you cannot do for yourself.
  • Create a savings account: Take some, or all, of the money that you have been paying credit cards with and regularly put it into a savings account. Since you have not been using all of your money to pay credit card debt, you might be pleasantly surprised to discover that if an emergency arises, the funds to deal with it are right there in you account.

The road to fiscal sanity is not necessarily a pain-free one. If adjustments to your lifestyle and spending habits are required, make the adjustments. Eating out in expensive restaurants may be convenient and enjoyable, but it is not really affordable. Vacationing in Aruba has a “cool” factor attached to it, but the Jersey Shore is more affordable. Everyone (at least in New York) needs a winter coat, but not necessarily one made by Giorgio Armani–a London Fog will work just as well. Making good decisions with your money is the key to regaining control of your financial life.

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  • Middletown Office
    225 Dolson Avenue
    Suite 303
    Middletown, New York 10940
    Phone: 845-343-6227
    Fax: 845-343-1927