Best Ways to Rebuild Your Life After Bankruptcy

by Lynnette Khalfani-Cox, The Money Coach on June 8, 2012

in Bankruptcy, Credit Cards


Filing for bankruptcy can be one of the most stressful financial events you will ever experience. Bankruptcy may not only take its toll on your credit rating, but also on your emotional well-being.

Even when you’re using a qualified bankruptcy attorney to work through the process, you will experience a certain level of stress and even anxiety about your financial future.

Nevertheless, it’s important to remember that you can still live a good life after bankruptcy and you won’t be treated like a financial outcast for the rest of your life!

For many people, filing for bankruptcy ends up being a positive decision and rewarding in many ways. When you rid yourself of overwhelming debts – such as credit card obligations and medical bills – bankruptcy can be the right step to help you get your financial life back on track.

Here are some steps you can take to rebuild your life after filing for Chapter 7 or Chapter 13 bankruptcy protection:

Learn to Let Go of the Guilt

Many people feel ashamed or guilty about the fact that they have had to file for bankruptcy. For some, it may seem like they’re looking for a quick-fix. Others are simply disappointed in themselves.


Take the time to identify whatever negative feelings you’re holding on to and just release them – let it go. Don’t let yourself wallow in self-pity or go on a deep (and counter-productive) guilt trip about your excessive debt problem.

It’s far better to focus your emotional energy on your present and future goals. So instead of feeling guilty, let yourself experience a bit of relief. At least currently, some of the financial burdens that were weighing you down are now gone due to your bankruptcy filing.

Reflect on the Situation

After things start to settle down after the bankruptcy proceedings, take a break to reflect on the situation. Ask yourself what key events or decisions you made ended up getting you here. What could you have done differently? How could your current situation have been better?

While it’s a good idea to ask these questions, don’t get caught up in blaming yourself or others, or being too hard on yourself. At this stage, you just want to pause and reflect on what happened, and basically just process the situation in a positive way.

Become a Pro at Managing Your Finances

You’ve probably learned some hard lessons through the bankruptcy process, and now it’s time to get serious about managing your money. Get committed to saving money. Put together a realistic budget. And make it a priority to pay all your bills on time.


Also, get help from a financial advisor or financial planner if you need to so you truly are getting a fresh start.

Pick the Right Credit Card

You can rebuild your credit rating after bankruptcy by opening up a secured credit card account. These types of credit cards work differently than your typical credit card because you make a deposit for your credit line.

Using a secured card gives you a chance to charge small amounts at a time and “prove” that you can be responsible with your credit. You’ll rebuild your credit gradually as you repay your debts on time and in some cases, you can readily convert your secured card account into a regular credit card.

Though bankruptcy can feel very stressful in the beginning, it’s definitely not the end of the world. You will get past this phase of your life.

And while it’s true that bankruptcy can stay on your credit for up to 10 years, it’s also true that you can begin to seriously bounce back from bankruptcy in just one year or so – as long as you pay all your bills on time and manage your finances wisely after your bankruptcy filing.


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Lynnette Khalfani-Cox, The Money Coach

Personal Finance Expert and Co-Founder at Ask The Money Coach.com
Lynnette Khalfani-Cox, The Money Coach is a personal finance expert, speaker, and author of numerous books on personal finance. She appears frequently as an expert commentator on television, radio and in print.

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