We've talked a lot about planning bankruptcy exemptions and strategizing with your bankruptcy attorney to fight a challenge to your bankruptcy discharge; but what about the planning necessary to ensure your financial success after your bankruptcy discharge?
Below are a few steps every debtor should take to increase their chances of financial success after bankruptcy:
- The first thing every bankruptcy debtor should do is determine how much income and debt they will have after their bankruptcy discharge. Do you earn enough money to pay off your debts after bankruptcy? Are there debts which will survive after your bankruptcy discharge?
- Once the debtor has received their bankruptcy discharge, they should begin to save up an emergency fund. Emergency fund savings after bankruptcy are critical in preventing another downward spiral into debt. One of the biggest problems that post-bankruptcy debtors have is accumulating more debt because they failed to plan for emergencies and eventually were forced to file a second bankruptcy. Avoid a second bankruptcy by creating an emergency fund which could cover three to six months of your expenses.
- Are you unable to save much money after your bankruptcy discharge? If you're having trouble saving for an emergency fund, you may want to consider increasing your income after bankruptcy. Can you ask for a raise? Apply for another position in the same company? Or, even consider a second job or side business? Making plans to increase your income after bankruptcy will put you in a better financial position.
- And finally, if you have debt which will survive the bankruptcy consider settling those debts. Or, if you cannot afford a lump sum settlement you should plan to make monthly payments so that the debt can be paid off in a reasonable amount of time, no more than five years.