Second Life: On the Other Side of Bankruptcy

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You were a high roller. You lived large. You did it your way. And you never, ever left home without it. Then the bills came in. It started with your home phone. Well, you were tired of hearing it ring anyway. Then it was the cell phone, then the cable, then the lights. When you called the police to report your car stolen, they informed you it was repossessed. Finally, the eviction notice comes. It doesn’t matter. You have already moved your family into your parent’s house. The lights have already been turned out. The party is most definitely over.

Don’t spend too much time feeling sorry for yourself. While it is true that life as you know it is over, there is a second life for those in your position who are brave enough to reach out and take it. The first thing you need to do is finish bringing the first life to a proper end. You can’t start a second life until the first one is well and truly done. You need to call an attorney and get help deciding the best way to close things out.

Finding a good bankruptcy attorney that will take you through all your options is your best bet. There are several chapters of the bankruptcy law. Your attorney can help you find the one that best fits your situation. You might opt for debt restructuring as opposed to complete debt cancellation. Whichever you choose, there is life after bankruptcy. To get the most out of that second life, there are a few things you should know:

You can still buy a house and car

A lot of people believe that once their car is hauled away by the repo man, their driving days are over. Likewise, once the eviction notice comes, they are stuck living with their parents. Neither is true. Given the right steps, buying a home is possible within 18 to 24 months following a bankruptcy. Buying a car after bankruptcy is even easier. You can find someone who will sell you a car regardless of your credit. It is the monthly payment and interest rate that will get you. Once your finances are in order, it is not only okay to shop for a car, but shop around for a decent interest rate, at least, shop for one you can live with.

Use your credit card as a credit repair tool

One of the keys to getting into another house and car is to do some credit repair to raise your score. Once people get out of credit trouble, their first inclination is to either celebrate by going hog-wild, or cutting up their credit cards. Both are wrong. What you want to do is learn how to strategically use credit to your advantage. Your credit score is improved by making regular, monthly payments until your balance is paid off. It doesn’t help to buy something with a credit card and pay it off the next month. It is better to pay off a small balance consistently over time.

Your potential creditors want to know that you can follow up month after month. If you don’t have a credit card after the bankruptcy, don’t worry. The offers will start coming almost immediately.

Live small

Finally, the second life should be a smaller life. But smaller does not mean worse. It means living within your means. It means delayed gratification. It means bringing your own lunch to work instead of going to Applebee’s everyday. It means renting a movie instead of going to the metroplex. If public transportation is available in your town, skip the car payment. It means renting an 800 sf apartment instead of buying a 2,500 sf house.

In short, it means growing up. Without this step, the second life will end much the same as the first one. There is definitely life, and a very good one, on the other side of bankruptcy. Learn what it means to live small, and you will discover the real jackpot life has to offer.