Recovering From a Bankruptcy

So, you’ve received your discharge from your bankruptcy filing. Now what? How do you begin to rebuild your financial health? A few, simple, but not necessarily easy steps can assist in your recovery.

Verify your Credit History

Bankruptcy provides a fresh start, clearing away most of your debts, so you want to be certain that your credit report is accurate and properly displays any debts that were discharged in the bankruptcy.
If an account still appears in the credit report as open and delinquent, you need to contact the creditor and request that they correct how the account is reported.

You can obtain copies of credit reports from the three reporting agencies, Experian, Equifax and TransUnion. provides a yearly, free credit report. The Federal Trade Commission runs this site, so don’t be fooled by other sites with similar names that want to sell you something.

Create a Budget

Once you have checked to ensure your credit report is accurate, you can begin the hard work: improving you credit history. To begin, you need to review what caused your bankruptcy. Was it a divorce, job loss, medical expenses or overreliance on credit cards?
Often it is a mix of causes, but what is important now is to identify the causes and change your behavior. Creating a budget is a good place to start.

Figure out how much you have to spend on housing, food and transportation. From the money you have left over, if any, you can determine how much “spending” money is available. This is a good time to create a savings account, if possible.

Pay Bills On Time

The most important aspect of rebuilding your credit is paying your bills on time. After a bankruptcy, you are reestablishing your credibility with your creditors.

Creditors only loan money with the expectation of being repaid and a credit agreement is, in essence, a promise to pay. By repaying bills on time, you demonstrate your reliability and fulfill your promise. This in turn will eventually result in lower interest rates and a better credit score.

Source: News Olio, “Credit help: How to continue your financial life after bankruptcy”