The Do’s and Don’ts of Bouncing Back From Bankruptcy

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Excerpted from Bounce Back From Bankruptcy:

A Step-By-Step Guide to Getting Back On Your Financial Feet, 4th Edition

By Paula Langguth Ryan (Permission to reprint with attribution)

 

Bankruptcy is the hardest financial decision you’ll ever face.  It can be a fresh start, or it can be the start of the biggest financial nightmare ever, whether or not you ever want credit again.  To make sure you truly get a fresh start after bankruptcy, follow these “Do’s and Don’ts”:

 

DO:


  • Get copies of your credit reports from all three major credit bureaus and make sure the accounts that you included in your bankruptcy are listed as discharged.
  • Get a secured credit card – but make sure the card issuer reports your payments, offers a grace period, and doesn’t report your card as secured.
  • Set up a DebtBuster Strategy for your undischarged debts – and pay them off as quickly as possible.
  • Wait two years before applying for a mortgage or car loan to get the going interest rate.
  • Call a credit counselor and cut up any new credit cards if you find yourself carrying balances again.
  • Take steps to heal your relationship with money so you break the cycle that got you into debt.

 


DON’T:


  • Jump at every credit offer that’s mailed to you.  You’re better off seeking out a good secured credit card on your own.
  • Reaffirm debts that aren’t essentials – only reaffirm debts on your car, mortgage and major appliances.
  • Let future creditors shame you into paying a higher interest rate because of your bankruptcy.  Once you’ve paid regularly on a secured card for two years, you’re eligible for the going interest rates for car loans and mortgages.
  • Take out a car loan for longer than two years – there’s too great a risk of becoming “upside-down” on your loan, owing more than the car is worth. Only buy as much car as you can afford.
  • Go to “bad credit – no problem” lenders or take out “payroll advance” loans.  These creditors will bleed you with outrageous interest rates.
  • Allow the mistakes of the past to determine your financial future.

 

Unless we learn from our mistakes, we’re doomed to repeat them. Even events that are out of our control contain valuable lessons that we can use to create the lives we truly desire. You can be your own worst enemy after bankruptcy, or you can be the best guide you’ve ever had.  Follow these tips and you’ll soon be back on your financial feet!

 

*****

Paula Langguth Ryan was the only consumer to testify before the National Bankruptcy Review Commission. Ryan is the author of Bounce Back From Bankruptcy and Giving Thanks: The Art of Tithing (CM Press)

ATTN. MEDIA PROFESSIONALS:

Paula Langguth Ryan is available for media interviews in person and via telephone.
For review copies and availability, contact Liz Losher at 970-590-3732 or email Paula directly at:

paularyan@artofabundance.com