Bankruptcy

Steps to rebuilding your life after Chapter 7

Bankruptcy Chapter 7

Recently on our legal forum a user wrote, “I always prided myself on paying my bills on time, living with very little credit, and following a strict budget. I was married for 10 years. During that time my husband spent every last dime we had and made numerous financial mistakes. He recently left me for another woman, but I am left with a great deal of debt and financial chaos. I have been considering filing Chapter 7 bankruptcy. If I decide to file can I rebuild my life or will I be relegated to credit exile forever?”

Steps to recover after Chapter 7 bankruptcy


Filing bankruptcy is an important decision. It’s good that you’re asking these questions before you file. Too many people see Chapter 7 as a panacea to all of their problems, giving little consideration to the financial ramifications.

The good news is that filing bankruptcy, especially for those who are committed to making the right steps following bankruptcy, can be the right choice. With that in mind, let’s take a look at several steps you should take after bankruptcy to ensure you get off on the right financial footing.

Know that you’re not alone.

There are thousands of US citizens who face a financial crisis due to death, divorce, job loss, or illness. In fact, more than eight hundred thousand people filed for personal bankruptcy. Although there are some citizens who simply made bad financial decisions, many more were a victim of situations beyond their control.

What does this mean for you? It’s time to make peace with your reality and not let feelings of failure or disappointment ruin your future. Yes, you might have made some bad choices. Instead of wallowing in self-pity, however, it’s time to accept your current situation and work to become more disciplined and better educated in the future so you don’t make those same mistakes again.

Surround yourself with the right people.


Our friends and those around us can impact us more than we realize. Find friends who will provide you with the emotional support you need. With divorce and bankruptcy this will become more important than ever.

Create a realistic budget.


Creating a realistic budget and following it might be the most important step you take following bankruptcy. Consider using only cash to make purchases. Do not buy anything you do not need. Understand how to live below your budget. Finally, make sure to save enough money in an emergency fund to pay for unexpected events.

Pay all of your bills on time.


One of the most important steps to rebuilding your credit score is to pay all of your bills on time each month. Consider setting up automatic bill payments. If you cannot pay all of your bills on time you will need to prioritize your bills and pay for food, housing and utilities first.

Apply for a secured credit card.


Another critical step to rebuilding your credit is to request a secured credit card. By charging small amounts on your card each month and repaying your bills on time you can begin to rebuild your credit score.

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