Reestablishing Credit Part 2 –
Another important part of a sound financial future is saving and Reestablishing Credit. This may sound impossible, especially in a Chapter 13, but if you work on your budget (as discussed inPart1) it is possible to put away a little bit of money so that you are more prepared for emergencies. A good rule is to try and establish savings that equal 3 to 6 months of regular expenses. It sounds like a lot to save, but putting away even 5% of your paycheck each month will help to get you there. This may not cover any and every emergency, but it will definitely help if you have an unexpected car repair or hospital visit. You have to train yourself to live without a credit card. You should only spend what you can afford.
Non-dischargable debts are sometimes a scary prospect in Chapter 7 bankruptcy. Examples of this type of debt include: child support, student loans, and certain taxes. These days, most people will have or have had this type of debt on their record. It is important that you keep paying on these debts and keep current with these payments as part of Reestablishing Credit. If you are unsure whether a debt is dischargable or not, please speak with your attorney. They should be able to provide you with a list of debts that are not discharged in bankruptcy. Also, be sure that you disclose all debts to your attorney when filing, since any debts not listed are still owed even if the bankruptcy is discharged.
Before we get into the types of credit that can help you rebuild, there is one more tip to help you with your finances. Know your personal money mistakes. If you identify the mistakes that you made in the past with your credit, it will help you to not make the same mistakes in the future. Did you allow family to use your credit or borrow money? Did you purchase a home or car that was outside of your means? Did you spend too much money on unnecessary items or luxuries? Did you run into emergencies without having a savings cushion? Next time, be more careful lending money or credit. In the future, buy a smaller house or a used car if you cannot afford a higher payment. Try and cut back on eating out and make sure you pay your bills before you go to the movies. And make sure that you save save save!
We are Myrtle Beach’s leading bankruptcy attorney’s and if we can help answer any questions you may have, please contact our office today for a FREE CONSULTATION.
To Be Continued….
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DISCLAIMER: The information contained on this page is for general information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.