Most people who come into our office want to build wealth but they have so much debt, it seems years away, if not out of reach. We’ll tell you right now that the fastest way to build wealth is to eliminate debt. By getting out of debt and staying out of debt, bankruptcy filers have a better chance of becoming wealthy than those who remain saddled with debt for years.
Once a debtor considering bankruptcy realizes that, they want to shift their mindset and start focusing on that – having zero debt. While credit cards are a “necessary evil” to rebuild one’s credit after bankruptcy, it’s vital to pay them off in full each month. So, if you’re considering bankruptcy and you do pull the trigger, the first thing you want to do is decide not to go into debt anymore.
Tips for Life After Bankruptcy
If you want the latest car or truck but it means taking on a $500 or $900 payment, you may want to consider saving up the money and paying cash for a car you can afford. We’ve talked to plenty of millionaires and not one of them said they made it all happen with their Discover points. To obtain an admirable FICO score after the bankruptcy, the kind that the lowest interest rates rely on, you have to focus on doing these 5 things:
- Open and use credit cards, but pay them off in full each month
- Pay all of your bills on time every month
- Do not take on new debt
- Monitor your credit very closely after bankruptcy and if you spot something that’s incorrect, take steps to remove it
- Stay at your job as this shows banks that you’re stable and worth lending to
Avoid Past Mistakes
“It’s easy to think of filing for bankruptcy as getting a clean financial slate, and to some degree, this is true. However, if you don’t learn from the mistakes that got you to that place and take steps to improve your financial health, you won’t be any better off over the long term. Take an honest look at your spending habits and budget and figure out where you need to cut back or exercise more self-control in the future,” wrote Lucy Lazarony for credit.com.