So you've finally been discharged from your bankruptcy, and now you are free to do whatever you want again. The world is your oyster!
But before you grab a bucket and head for the
beach, there are a few things you need to know. First of all, a
bankruptcy discharge is not a license to shop. That itch to celebrate
your newfound freedom might almost impossible to ignore, but if you
want to stay debt-free, you are going to have to lay low for awhile,
especially in the three months after your discharge.
Here's
why: you probably feel like you've been in debt forever, but you're
not the only one who knows it. Credit card companies have caught the
scent too, and chances are you're getting applications left, right
and center these days. Talk about tempting! The best thing you can do
is to throw those applications right into the recycle bin, regardless
of how much this or that company says they want to help you rebuild
your credit. The truth is they don't want to help you rebuild; they
want to help you get back in the position that caused you to go
bankrupt in the first place.
Those 'high-risk' cards come
with a lot of caveats - the fee you pay to get the card, for
instance. Some cards will actually charge you for the card by placing
it on your card. So if your card has a $100 limit and it cost you $75
to get, guess what? You only have $75 in credit. Go over that, and
get ready for some nasty fees.
So how can you get your
life back to normal? Before you do anything else, you have to change
your spending habits. Really think about the cost and quality of
things and put yourself in control. For example, is it really worth
it to buy that brand-name bread when the store brand is just as good
and costs a dollar less? It's a small-scale example, but if you can
apply that kind of thinking in baby steps, pretty soon you'll be able
to apply it to everything you buy, no matter how large. So clip
coupons, try to buy when things are on sale, and don't go hog wild
when you do buy.
Second, prioritize your bills. Your most
important, must-pay-on-time bill every month should be your rent or
mortgage. It's your shelter, and without it, handling anything else
that comes your way becomes a lot more difficult. Your utilities are
next, because you have to be able to cook and store your food. Your
third most important bill might be the telephone, the fourth your
cable TV or satellite, and so on. Take an average of how much of your
pay check goes for rent/mortgage and bills. Then, set aside a little
bit of each check to put toward each bill. It might be tedious, but
trust me; it will be worth it once you get into the flow.
The
third thing you have to do is save up $500, doing the same as you've
done for your bills - take a bit out of each pay check. Only this
time, open a new account. Once you've saved $500, run to your nearest
bank and request a secured bank loan for that amount. The bank should
have no problem granting your request, as the money's already there.
For the next 90 days, make your payments on time, every time. You
will be amazed at how much faster this will build your credit than
those high-risk cards!
If you have to use credit, why not
do so to your advantage? Here's how: purchase an item that's on sale
with your credit card. Then, when your credit card bill arrives, pay
the item off in full. That's it! You get to enjoy your new item for a
month before you have to pay for it. If you can stick to this, your
credit will have nowhere to go but up.
By applying the
above tips, your credit will be given a boost at a time when you need
it the most - in the first 3 or 4 months after a bankruptcy
discharge. You've been given a second chance. Don't give up - you can
do it!
313-343-9930 or email at debtfreedetroit@gmail.com
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