We've talked about what to do when faced with debt troubles after bankruptcy; but what can a post-bankruptcy debtor do to prevent financial disaster from striking twice?
Let's take a look at a few tips:
- Post-bankruptcy debtors should never mistake a money draining liability for an asset. One of the most common mistakes post-bankruptcy debtors make is purchasing cars, homes and other expensive "assets" while failing to save and/or invest. Loading up on assets that really are liabilities can only open the door to a second round of bankruptcy. If you want to purchase a home or vehicle make sure that you can really afford it before taking the plunge.
- Post-bankruptcy debtors should handle divorce amicably. A divorce that goes to court can become expensive, destroy wealth and lead to a second bankruptcy. It's best to avoid divorce court if you want to prevent financial disaster from striking twice.
- Post-bankruptcy debtors who are running small businesses should make sure that their personal and business finances are separate. Combining personal and business funds could create financial disaster. If either your personal or business finances face troubles, you may suffer a domino effect if you've failed to keep those finances separate.
- Post-bankruptcy debtors should invest in quality advisors. If you know that you have trouble keeping a budget, sorting through tax issues or handling other personal finance issues, invest in a quality advisor who can help you through the process.
- Post-bankruptcy debtors should educate their entire family about personal finance. Getting everyone on board with your financial fitness program will go a long way to preventing the type of financial problems that can lead to a second bankruptcy.