Bankruptcy can help you eliminate significant debt and move forward financially. If you recently filed bankruptcy, you are one of many Americans who also took advantage of this legal option.
According to the U.S. Courts, in 2021, annual bankruptcy filings totaled 413,616. As you move forward from filing, the following tips can help you set up a successful budget and get your finances in order.
1. Categorize your expenses
Write down all of your regular expenses and categorize them as fixed, variable and irregular. Fixed bills include expenses that happen every month, variable bills are those that change from month to month and irregular expenses are those that happen occasionally. Compare these expenses with your income and analyze how much you can spend every month.
2. Start saving
After you file for consumer bankruptcy, devote a portion of your monthly income towards savings. Start by putting money in an emergency fund that can help you manage unexpected expenses, such as medical bills or car repairs.
3. Begin working on your credit
When you filed for bankruptcy, the process likely damaged your credit. And the filling, depending on whether you filed Chapter 7 or Chapter 13 bankruptcy, will remain on your credit report for several years. Look for ways to start rebuilding your credit, such as using a secured credit card.
Sticking to a workable budget takes diligence and practice, especially if you previously relied on debt. Taking time to develop a budget and then stick to it can help you avoid significant debt and successfully move forward from the bankruptcy process.