It’s common to become overwhelmed by their emotions at the thought of filing for bankruptcy. You may feel shame, guilt or fear of being a financial failure.
The truth is that there are many reasons why people declare bankruptcy, and it doesn’t mean you’ve failed. Instead, you are taking a vital step towards rebuilding your life.
Bankruptcy is a tool
Many Americans try to save and get ahead, but most still live paycheck to paycheck. An unexpected job loss, medical bills or major home repairs can suddenly turn their world upside down. What was once manageable has become unmanageable as bills pile up and quickly become overwhelming. None of these challenges is a reflection on a person’s value. It’s simply a fact that life is unpredictable.
Bankruptcy is not a judgment on someone’s life. Instead, it’s a legal tool to help people do a financial reset on their lives. Bankruptcy gives them the breathing room they need to start creating a strong financial foundation for the future. Here are some strategies that may help you rebuild:
- Create a budget: Having a budget and tracking your spending habits are your best tools for managing your finances. Prioritize your essentials such as housing, food and utilities.
- Build an emergency fund: An emergency fund is crucial for handling those unexpected expenses. Start with a goal of $1000 and eventually build up to having three to six months of living expenses.
- Educate yourself: As part of your bankruptcy proceedings, you must go through credit counseling. Your education shouldn’t end there. Take time to learn about money management so you can make informed decisions.
- Be patient and stay positive: Recovering from bankruptcy will take time, and you will likely make mistakes along the way. Show yourself compassion and move on. Maintain a positive mindset and celebrate each small win.
Don’t let your bankruptcy define you. You have the opportunity for a fresh start. Learn from the past and create a clear plan for the future. You deserve this second chance.
