If you’ve recently filed for chapter 7 bankruptcy in New Jersey, it may seem like there is no end in sight to the cycle of debt. However, it is possible to recover from chapter 7, provided you take the right steps. Forbes offer a few effective tips on how you can rebuild your credit and work towards a brighter financial future in the aftermath of a bankruptcy filing.
Create a Budget (and Stick to It)
If problem spending contributed to your debt, the first step after filing for bankruptcy should be to create a realistic budget. Schedule automated payments to make sure your bills are being taken care of on time and only make those purchases that are necessary to your life. In particular, avoid making frivolous purchases using credit cards to prevent interest fees from doing damage.
Rebuild Your Credit
While credit cards can land you in hot water, they are essential when rebuilding credit. A secured credit card is best in this case, which typically entails a deposit and manageable credit limit. Make small purchases using this card and be sure to pay off the total amount when payment is due. A secured credit card can reestablish your credit history in a responsible manner, which will be important to future credit reporting.
Keep Track of Your Credit Score
Keeping track of your credit score will serve a few different purposes. Along with ensuring no fraudulent charges have been made in your name, it will also allow you to stay up-to-date on your credit score. In general, a score of 700 or higher is considered good, and at this point you’ll be privy to more choices in terms of credit cards and loan options. Just be careful that you don’t fall back into the same poor spending behaviors that you experienced prior to filing once your score improves. The goal is to have various types of credit that you use responsibly to show that your financial outlook has improved.