Rebounding From Bankruptcy: Can Financial Planning Be The Lifeline You Need To Recover?

Posted on: 19 June 2018


Millions of Americans are drowning in debt, and for some, bankruptcy is the only way out. While filing may make you feel like you've lost in life, it also provides a major chance at recovery, leading to a more secure and predictable outcome. That will only happen, though, if you avoid the mistakes of the past and actually plan your financial future.

Don't Spend Money Aimlessly

Even if you have "extra" cash in your pocket, don't ever consider money expendable. Treating money like it's expendable means spending it on unplanned and unnecessary items, and while it may only seem like ten or twenty dollars, here and there, it adds up to a huge amount of waste. If you can't resist spending it, don't keep that cash with you.

Do Not Accept "Low/Poor Credit" Offers

After bankruptcy, you may have difficulty being accepted for a loan and that's okay, because you really do need time to reorganize your finances and develop better habits. Resist the temptation to accept offers on low or poor credit and those that target consumers who have filed for bankruptcy. The majority of these offers will charge you astronomical interest rates, which could put you right back where you started with debt. Distinguish between what you need and what you only want, opting to forego the latter in favor of a more secure financial future.

Establish Relationships With Financial Professionals

Filing your taxes and reorganizing your financial life all on your own may not yield the most optimum results. While you may think paying an accountant, tax advisor or financial planner isn't economically practical, for the money they can save you and the lessons they can teach you, it's actually well worth what you pay. Establishing long-term relationships with these money gurus will help you get ahead of the game and stay there, making the money you spend on their services a solid investment.

Learn To Live On Less, Even When You Make More

After a financial crisis, especially a prolonged one, you'll likely look forward to a time when you can splurge on yourself or start spending without the guilt and worry, but going down that road could easily lead you back to the mess that led to the crisis in the first place. Learn to actually change the pattern of your thinking, so you're focused on long-term saving and stability, rather than short-term gratification.

Create An Actual Plan For Your Money, And Stick To It

With the guidance of professionals and through the lessons you've learned, you should come up with a real plan for your money that will withstand nearly any curve ball life can throw at you. Treat your financial plan like a set of instructions, following them carefully every payday and when your bills are due. That plan must include a path to savings and that, too, must be adhered to with discipline. As fun as it may be to own the latest cell phone and designer clothes, it's a lot more fun to have a cushion of cash in the bank that will protect you when needed. Treat your financial plan like a roadmap, following it diligently to your stable and secure future, free from staggering debt and uncertainty.

While bankruptcy is no cake-walk, it does offer you the opportunity to financially redeem yourself and reclaim control over your future. Financial planning can be your lifeline to recovering from bankruptcy, if you're fully committed to the process.

For more information, talk to companies like Family Financial Partners