Many people who file for bankruptcy do so because of significant life events, such as exorbitant medical bills due to the illness of a child or the costly burden of a divorce. For many, filing for bankruptcy is an enormous relief; it offers the opportunity to build a new financial future. However, after filing for bankruptcy, you will need to make some changes to your lifestyle and possibly your housing situation. You’ll also need to be firmly committed to improving your credit rating and managing finances wisely.
Evaluating Your Housing Choices
One of the most common questions people have about bankruptcy is whether they will lose their home. In most cases, filers will retain ownership of their home. Some people do choose to give up their home when they feel the financial burden is too much for them. If this describes you, you can expect to rent for a while after your bankruptcy before you can qualify for a mortgage. Landlords and property management groups often evaluate a prospective tenant’s credit history, which will reflect the bankruptcy. Often, filers find that renting an individual property, duplex, or apartment within a small building is more feasible than renting from a landlord that owns a very large complex. Landlords with smaller properties may be more apt to recognize that you’re trying to rebuild your finances.
Modifying Your Lifestyle
Even if you filed for bankruptcy due to circumstances beyond your control, you’ll need to practice sound financial management after filing. Since qualifying for a personal loan when emergencies arise is going to be difficult, it’s vital to build an emergency fund. Plus, if you filed for Chapter 13 bankruptcy, you’ll be making structured payments on your debts. You’ll need to cut unnecessary expenses from your budget and live a modest lifestyle.
Improving Your Credit Rating
Improving your credit rating should be one of your highest priorities after bankruptcy. In addition to making all of your payments on time, you may be able to build your credit with a secured credit card.
The bankruptcy attorneys of Cutler & Associates, Ltd. offer our clients decades of experience in filing for bankruptcy in Illinois. We can help you build a solid financial future with a Chapter 7 or Chapter 13 bankruptcy.