Regardless of your age, no one ever likes to feel like they are starting over. Whether it’s life after a marriage that has ended in divorce or picking up the piece of your career after a job loss, these periods of upheaval are difficult to navigate and can be embarrassing, stressful, and exhausting.
Recovering from bankruptcy is no different. While bankruptcy is often the best answer to serious financial troubles, it can be very difficult to make a plan for how to move forward and feel confident in doing so. You can feel like you’re doomed to repeat those same failures again and again, or like it’s impossible to bounce back.
You can find financial well-being again! Here, we’ll tell you what you should do after filing bankruptcy to make the future a happier, brighter one for yourself, your household, and all those big plans you have!
First – Know That there is Hope After Filing Bankruptcy
Just as people who have lost love to divorce can find it again in future romances, so too can you find financial stability and a better life after filing bankruptcy. The process will take time. The path forward isn’t always going to be a smooth or straightforward one. But you can do it – and once you do, you’ll know that you got there on your own two feet!
Look for Work
Your first priority should be finding employment. If you are already employed, disregard this move. Don’t love the job you’re currently working? That’s okay; we’ll discuss your next steps soon. Before you can run toward a better financial future, though, you have to take the baby steps of securing steady income through whatever work you’re able to find. It’s not a permanent career move as much as a step in the right direction!
Look for Work That You Enjoy
Now that you’ve got a steady income, begin searching for the job you truly want to do. This can begin as part-time work in supplement to your current position, or it can completely replace your current job. However, it’s always easier to find a better job if you’ve already got one.
By looking for better work while you’re already employed, you take away that desperation that might cause you to jump at an opportunity that’s not really suited for you just to pay the bills. Likewise, it gives you the kind of perspective that you need to find a job you can really see yourself doing for the rest of your working years. Think about that while you search, and you’re sure to find the right fit for you.
Keep those Purse Strings Tight
After filing bankruptcy, you’ll need to tighten up your spending. This means keeping costs low in every way, from monthly necessities to unnecessary but enjoyable purchases. Forgo what you can and make do with less in the areas of entertainment, travel, and other non-necessities. Cut fuel costs, pack your lunches for work, and skip the drive-thru to make your own coffee for a while. It might not sound like much, but it can really add up!
Sock Away Some Savings
Say you’re finding that all that saving money is putting more in your pocket than you need for basic expenses. What now?
Instead of making purchases you don’t need, use this time of conservative financial conduct to create and fortify your personal savings. If the year 2020 taught us anything, it is that families can face total ruin if they are caught without money in savings during an unexpected disaster. Even those who have substantial savings can always stand to add to it, and after filing bankruptcy, you’ll definitely have room for growth in your savings account. Put all that extra money you’re saving where it belongs, so you won’t be caught under the weight of debt ever again!
Know the Dos and Don’ts of Big Purchases and Investments After Bankruptcy
There are plenty of lists out there of what you should and shouldn’t do in terms of making large purchases. However, there is considerably less guidance in place for couples and families recovering from a bankruptcy. Knowing where to invest your funds during this time can mean the difference in ending up here again and making a better path forward.
First, avoid large investments and frivolous purchases. While the latter might seem obvious, the former makes less sense at first glance. Shouldn’t you put money into investments, now that you’re able to? While investing isn’t a bad idea by any means, large investments during an uncertain time can be – especially if you don’t have adequate funds in savings. Prioritize putting money there first to ensure that your future is protected.
What about buying a house? Now that your credit is in recovery, you may be able to purchase a house. It may also save you from the rising cost of rent in your area, but it also comes with plenty of other considerations like taxes and upkeep expenses. If you’re not sure whether buying right now is the right choice for you, consult a financial advisor or your bankruptcy attorney for guidance.
Another smart move for you right now might be setting up a Roth IRA. These accounts are unique from others in several ways, including:
- The Roth IRA can double as both a savings account for retirement and an emergency fund.
- This is because your original contributions to a Roth IRA can be withdrawn any time, without fear of taxation or penalty fees.
- The money that stays in your account will continually grow, tax-free.
- Only by removing earnings on your original contribution – not the amount, itself – will you incur taxes and fees.
These accounts are a great way for older adults to set up a fund that will come in handy in case of emergency, while protecting their post-retirement future as well.
If you still have questions about how to proceed after filing bankruptcy, let the knowledgeable staff at the Van Horn Law Group guide you. They can help you determine what your next steps should be, if specific recommendations are a good fit for your scenario, and how to make a workable plan that will put you on a path to a better financial future!