Sometimes, such as in cases of failed businesses, bankruptcy is unavoidable. In cases of massive debts accrued by individuals, bankruptcy is the culmination of years of bad spending patterns and financial decisions which theoretically could have been avoided. If you are coming out of bankruptcy or have just been approved, you are likely eager to start fresh and do everything in your power to ensure you never have to file for bankruptcy again.
What to Do After Your Bankruptcy is Approved
Once you are approved for bankruptcy and your repayment plans kick in or your debts are discharged, there are a few things you can do to avoid bankruptcy for good:
- Create a budget and stick with it. Monitor your spending closely and avoid spending money you don’t have. By learning to live off your current income, you can avoid racking up additional debt to pay for things that have more affordable alternatives, such as homes, cars, etc.
- Avoid extravagant or unnecessary spending. If you don’t need a 60” television, a brand new sports car, or a vacation to Mexico, don’t pay for one. Make sure you use the income you make to pay for necessities first and practice saving money for large, fun, or non-essential purchases. Avoid impulsive purchases as well, and commit to learning how to save up for things you want, rather than borrowing to afford them immediately.
- Build up essential savings first. Before you start saving up for an exotic vacation or fancy gadget, it may be wise to create an emergency savings fund in order to create a financial cushion in case of sudden illness, disaster, job loss, or any other sizable, unforeseen expense. It is also crucial to save as much as possible for retirement, in order to avoid having to work during your old age or take on additional debt to afford age-related expenses in the future. If you are unable to afford retirement or are caught flat-footed in an emergency, extravagant purchases and luxuries won’t carry you very far.
- Enlist the help of a financial advisor or counselor. If you are just wrapping up your bankruptcy filing, chances are you’d rather not think about money for a while. However, if you don’t take deliberate steps to change your financial habits and monitor your spending, savings, retirement funds, etc., you will likely end up in the same position all over again. One of the best ways to remain financially accountable is to meet with a financial advisor from time to time and work through a financial plan together.
Speak with a Bankruptcy Attorney in Harrisburg Today
Sometimes the best path forward involves bankruptcy, in which case you will need an experienced representative to advise you throughout the process and help ensure you are not making critical (or expensive) errors when filing. At Dethlefs, Pykosh & Murphy Law, we believe in working with you until your best outcome is achieved. If you are unsure whether bankruptcy is your best option, we are available to help you evaluate your circumstances, consider your options, and move toward an ideal outcome.