Filing for Chapter 7 bankruptcy can be a good way for people in New Jersey to take control of their debt once and for all. However, you want to make sure your finances remain stable after filing, or you could wind up in the same exact predicament after so long. In this case, MoneyCrashers.com offers the following tips on how you can bounce back after bankruptcy.
While Chapter 7 can get rid of any unsecured debt (such as credit card debt), it won’t necessarily remove all of your debt. For instance, if you owe money for student loans or child support payments these debts will remain after you file. Accordingly, it’s important to continue paying off any remaining debts to prevent more damage from occurring to your credit score.
While it’s not always the case for people who file for bankruptcy, problem spending can lead you down a dark financial road. Establishing a reasonable budget will help curtail spending, which will prevent debt from building up in the future. Consider how much of your income goes towards your expenses and try to excise any unnecessary expenditures (such as eating out on a frequent basis).
Along with the above tip, you should also make an effort to grow your savings. Savings are crucial for unexpected expenses, such as an emergency car repair or medical expense. When you have robust savings, you won’t have to dip into your regular income to pay for things, which can be highly beneficial when rebuilding your finances. Think of savings as a safety net; when times are tough they’ll prevent you from falling into a financial black hole.