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Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Advertiser Disclosure

Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear below. Advertiser Disclosure

Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Advertiser Disclosure

Bankruptcy can be difficult and stressful, but it can also offer a fresh financial start. While bankruptcy will stay on your credit report for seven to ten years, it can help you qualify for a mortgage or other credit in the long term.



Life after bankruptcy can be difficult, but recovering financially and starting fresh is possible. You may have to manage your cash flow carefully and rebuild your credit, but with perseverance, you can get your finances back on track.

Get All The Paperwork


Though it may not seem like a critical step, save all paperwork from your bankruptcy case. You may be asked for copies of the bankruptcy files in the future, especially when applying for a mortgage, loan, or other financial products.

It’s always a good idea to keep your bankruptcy paperwork handy. That way, you’ll be prepared if a lender or debt collector contacts you about any of the debts included in your bankruptcy filing. And if a debt collector tries to collect on a debt you thought was discharged in bankruptcy, you have proof.

Paperwork You Should Have:

  • Bankruptcy petition and schedules
  • Proof of income that was included with your petition
  • Social Security proof of income included with the petition
  • Correspondence from the bankruptcy court, your attorney, and the bankruptcy trustee
  • Final bankruptcy discharge

Start Saving Money

save money

Bankruptcy can be a tough road to travel, and the last thing you want is to find yourself in the same situation again. To help prevent this from happening, establish good financial habits like starting a savings account that you can access during tough times. Doing this allows you to set yourself up for success and avoid repeating history.

Money management is key to rebuilding your finances. Creating healthy money habits now will help you in the future. Prevention is the best medicine, and saving money is a great way to start.

Saving money doesn’t have to be a chore. You can make it a habit by setting up automatic, recurring transfers to a savings account. This way, you’ll never even miss the money you’re saving.

One way to do this is to set aside a certain percentage of each check you receive and deposit it into a savings account. It is recommended to save 10 percent or more per paycheck. Choose an amount you can comfortably and consistently save each month to reach your financial goals.

Instead of having your paycheck deposited into one account, consider directing a percentage to a separate account. This can be especially beneficial if your bank or credit union allows you to set up recurring, automatic transfers from a checking account to a savings account. Doing so can help you build your savings while meeting other financial obligations.

Create A Budget

A budget is not something to be afraid of. When used wisely, it is simply a spending plan that can help you achieve future financial goals. Having a budget can help give you insights into your spending habits and prevent them from getting out of control.

To create a budget, you’ll need to calculate your monthly earnings first. This will give you an idea of how much you can spend and save each month. Your income should come from reliable and recurring sources.

Once you have your income figured out, you can move on to the following steps:

  • Track your spending for one to two months: This can help you determine how much to budget for various categories of spending.
  • Identify your financial priorities: Upon tracking your spending for a month or two, you may find that you are allocating more money to certain categories than you would like. Alternatively, you may discover that you are not allocating enough money to other, more important categories. As part of this step, you may want to cut back spending on unnecessary items to keep your budget in line with your newly-set goals.
  • Create your budget: It’s time to make a budget for your monthly expenses. This should include all of your debts, bills, groceries, and entertainment. You should also set aside money for savings each month.

The 50/30/20 budgeting rule is a popular method for creating a budget. This rule suggests that you allocate 50 percent of your income towards your necessary expenses, 30 percent towards your wants, and 20 percent towards savings. By following this guideline, you can ensure that your spending aligns with your priorities and that you can save money each month.

There are many ways to budget and keep track of your spending. You can use a budgeting app, spreadsheet, or even a piece of paper.

Rebuild Good Credit


After you’ve gone through bankruptcy, improving your credit score is important. This will help you on the road to financial recovery. There are a few different ways to do this, depending on which type of bankruptcy you filed.

  • Pay bills on time: Paying your bills on time is a great way to improve your credit score. Payment history makes up 35 percent of your overall FICO credit score, so it’s important to show that you’re financially responsible. Focus on making timely payments on any debts you may have to demonstrate your financial responsibility.
  • Open a secured credit card: There are a few things you can do to begin rebuilding your credit after bankruptcy. One option is to open a secured credit card. With this type of card, you’ll need to put down a deposit that will serve as collateral for the card. The deposit amount will usually be the credit limit on the card. Making timely payments on a secured credit card can help improve your credit score. Once you’ve demonstrated responsible credit management, the issuer may upgrade you to a traditional credit card.
  • Have utility bill payments reported: To build a credit history, you must pay your monthly utility bills on time. Some utility companies offer services that report your on-time payments to credit bureaus, so it’s worth checking with them to see whether they participate in any such programs.
  • Credit builder loans: Loans of this nature involve placing money into an account. The lender will maintain control of those funds while you make payments towards the principal and interest of the loan. Those payments are then reported to credit agencies.

Assuming you qualify, filing for Chapter 7 bankruptcy can give you some much-needed financial relief and a fresh start. Under Chapter 7, most of your debts will be discharged, and you may be able to keep certain properties. One of the biggest advantages of Chapter 7 bankruptcy is that it can help improve your credit score over time. While bankruptcy stays on your credit report for up to 10 years, you can use that time to rebuild your credit by following some simple steps.

When you file for Chapter 13 bankruptcy, your debts are reorganized, and you make payments for three to five years. At the end of the repayment period, most of your remaining debt is wiped out, and you are no longer responsible for repaying it. However, bankruptcy stays on your credit report for seven years and can lower your score by up to 200 points.

Credit Reports Monitoring

After you file for bankruptcy, it is normal to feel anxious about checking your credit report. It is important to monitor your report regularly for accuracy. Incorrect information on your profile can lower your credit score. By keeping a close eye on your credit report, you can ensure that all information is accurate and up-to-date.

Having outstanding debt can negatively impact your credit score, even if the debt has been discharged. That’s why ensuring that your debts are accurately reflected on your credit report is important.

The mounting debt could be erroneously transferred to a new collection agency, which would be a challenge to resolve. This would only worsen the situation.

It is important to take action immediately when you spot an error on your credit report. You must contact the credit bureaus and the business that reported the inaccurate information. Be sure to explain the situation in writing, including any supporting documentation. It is also a good idea to keep records of everything you send.

The credit bureaus have 30 days to investigate your dispute. All evidence will be sent to the business that reported the information. The business will determine whether the information is accurate and notify all three credit bureaus. The credit bureaus must provide you with the results in writing, and if the dispute results in a change, you will receive an additional free copy of your credit report.

There are ways to keep track of your credit score and report. You can get a free copy of your report from each credit bureau once per year or take advantage of free credit monitoring online tools. Bankrate is a great resource for monitoring your credit score, and you can also set up fraud alerts through your banks to protect yourself from identity theft.

Keep Your Job And Home


After bankruptcy, it is essential to keep your job and home in order to rebuild your financial profile and reliability. You need to show lenders that you can repay debts such as your mortgage and that you have a steady income from employment. Many lenders also consider your employment history when reviewing applications.

A consistent income is one of the key factors that lenders look at when considering whether to approve a loan. A history of job hopping or employment gaps can make you appear to be a higher risk and may result in your loan application being denied.

You Should Have An Emergency Fund

Having an emergency fund is important in case you lose your job or have any other unexpected financial needs. You should start creating this type of savings account as soon as possible, even if you can only contribute a small amount of money regularly. The deposits will add up over time, and making regular deposits, no matter how small, will help you establish the habit of saving.

When it comes to saving your emergency fund, you have a few options:

  • A savings account with a higher interest rate. Banks that operate solely on the internet are a great choice for people who want to get higher interest rates than what traditional banks offer. Another advantage of using an online bank is that it is easy and convenient to access your funds.
  • A high-yield savings account. This is a great way to save money. You can earn a higher interest rate on your balance, and your deposits are insured by the FDIC or NCUSFI. Look for a bank or credit union that offers this type of account to get the most out of your savings.

After filing for bankruptcy, it is especially important to have an emergency fund because you will have limited access to credit. To build up your savings, consider getting a second job or a side gig that can generate extra income. Working part-time at an additional job can be challenging, but when you really need to build up savings, it may need to be done.

Focus On Your Goals


Are you hoping to own a home or car one day? Or maybe go back to school? After filing for bankruptcy, it’s important to focus on your financial future and set goals like these to help you stick to a budget and keep saving money.

Setting financial goals is an important step in ensuring your overall financial well-being. Having a specific, actionable plan to follow will help you achieve these goals. Additionally, breaking down large objectives into smaller, more manageable steps can make goal-setting more effective.

It is important to set financial goals, both short-term and long-term. Your short-term goals might include things like paying off debt or saving for a down payment on a house. Medium-term goals might be things like saving for retirement or college tuition. Long-term goals could be things like financial independence or leaving a legacy. No matter what your financial goals are, it is important to have the plan to achieve them.

Making good decisions about finances and managing cash flow is the best way to secure your financial future. It is important to have good money habits in order to achieve your long-term financial goals.

Final Thoughts

Although a bankruptcy filing can have a major impact on your credit score, it is possible to recover from it and get back on track. With some hard work, patience, and discipline, you can improve your credit score and create a better future for yourself. By incorporating responsible saving and budgeting habits into your life, you can make a positive difference in your financial situation.


Barbara Miller is a seasoned writer who specializes in tax-related topics. With years of experience in the field, she has established herself as a leading voice in the industry. Barbara holds a bachelor's degree in accounting from the University of Pennsylvania's Wharton School. She began her career as a tax accountant for a large accounting firm, where she advised clients on tax planning, compliance, and audit defense. Barbara's passion for writing led her to pursue a career in journalism, where she could combine her expertise in tax matters with her writing skills. She began working as a freelance writer for various tax publications, covering topics such as tax policy, tax reform, and tax preparation. Barbara's talent for writing and her in-depth knowledge of tax matters soon caught the attention of a leading tax relief website, where she now works as a staff writer. Her work involves producing engaging and informative articles on a wide range of topics, including tax relief options, tax scams, and tax planning strategies. Barbara is known for her ability to explain complex tax concepts in a clear and concise manner, making tax information accessible to a wider audience. Her work has earned her recognition and praise from both her peers and her readers. Barbara is committed to educating individuals and businesses about their tax obligations and helping them take advantage of the various tax relief options available to them. She believes that everyone has the right to be informed about taxes and to make informed decisions that benefit their financial well-being.  

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