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Life After Bankruptcy: Rebuilding Your Finances and Your Credit Score

Bankruptcy can be a challenging and overwhelming experience, but it’s not the end of the road. With the right mindset and a solid plan, it’s possible to rebuild your finances and your credit score after bankruptcy.

Here are some tips for getting back on track:

  • Create a budget: One of the most critical steps in rebuilding your finances is creating a budget. This will help you track your income and expenses, prioritize your spending, and avoid overspending. Make a list of all your monthly expenses, including rent, utilities, groceries, and any other bills you must pay. Then, compare your income to your expenses and see where you can make cuts.
  • Build an emergency fund: Life is unpredictable, and having an emergency fund is crucial for financial stability. Aim to save at least three to six months’ worth of expenses in a separate account. This will provide a safety net in case of unexpected expenses, such as car repairs or medical bills.
  • Get a secured credit card: After bankruptcy, it can be challenging to get approved for a credit card. However, a secured credit card can be an excellent way to rebuild your credit score. With a secured credit card, you make a deposit that becomes your credit limit. Use it responsibly, making timely payments each month, and your credit score will gradually improve.
  • Pay your bills on time: One of the most critical factors in your credit score is your payment history. After bankruptcy, it’s essential to pay your bills on time, every time. Set up automatic payments or reminders to ensure you never miss a due date.
  • Monitor your credit score: Keeping track of your credit score is essential in rebuilding your credit. You can monitor your credit score for free on many websites and apps, including Credit Karma and Credit Sesame. Make sure to review your credit report for accuracy and dispute any errors you find.
  • Consider credit counseling: If you’re struggling to manage your finances, credit counseling can be a helpful resource. A credit counselor can help you create a budget, manage debt, and rebuild your credit. Look for a reputable nonprofit credit counseling agency in your area.
  • Stay positive and patient: Rebuilding your finances and credit score after bankruptcy takes time and effort. It’s essential to stay positive and patient, knowing that every responsible financial decision you make will bring you closer to your goals.

It’s also important to remember that bankruptcy stays on your credit report for up to ten years, but its impact on your credit score diminishes over time. As you take steps to rebuild your finances, your credit score will gradually improve.

Remember, every responsible financial decision you make brings you one step closer to financial stability and freedom.

If you need help rebuilding your finances and your credit score after bankruptcy, call Berken Cloyes, PC at 303-623-HELP for a free consultation.