Our Bankruptcy Blog

Making Smart Financial Decisions After Bankruptcy

Emerging from bankruptcy is akin to coming out of a storm. The most pressing challenges have subsided, but the aftermath remains.

This new chapter, post-bankruptcy, is ripe with opportunities for rebuilding and growth. With dedicated effort and informed choices, you can navigate toward a brighter financial horizon.

Let’s look closer into how you can make astute financial decisions after declaring bankruptcy.

1. Embrace Financial Education

  • Understand the Basics: Familiarize yourself with fundamental financial concepts, including the workings of interest, the significance of credit scores, and the principles of budgeting.
  • Take Courses: Consider enrolling in financial literacy workshops. Websites like Coursera and Khan Academy offer courses tailored to various financial topics.
  • Read Widely: Books such as “Rich Dad Poor Dad” by Robert Kiyosaki or “The Total Money Makeover” by Dave Ramsey provide insights into managing money wisely.

2. Draft a Solid Budget

  • Income vs. Expenses: Begin by distinguishing between your fixed expenses (like rent or mortgage) and variable expenses (like entertainment).
  • Allocate Funds: With clarity on your spending habits, redirect funds from non-essential expenses towards debt repayment or savings.
  • Review Regularly: Adjust your budget as circumstances change, ensuring it remains relevant and functional.

3. Build an Emergency Fund

  • Start Small: Begin with a modest goal, perhaps saving $500, then expand to three months’ worth of expenses.
  • Open a Separate Account: This fund should be easily accessible but separate from your regular savings or checking account to avoid temptation.
  • Consistency is Key: Even if it’s just a small amount, regularly contribute to this fund.

4. Monitor Your Credit

  • Use Free Resources: Websites like Credit Karma allow users to check their credit scores without incurring charges.
  • Dispute Errors: If you find inaccuracies on your credit report, challenge them. These errors can unnecessarily lower your score.
  • Watch for Growth: As you rebuild, observing incremental improvements in your credit score can be an encouraging sign of progress.


Making Smart Financial Decisions


5. Avoid Unnecessary Debt

  • Be Wary of Credit Card Offers: Post-bankruptcy, you might receive numerous credit card offers. Scrutinize terms and interest rates before accepting any.
  • Limit New Credit Lines: Instead of multiple cards, consider a secured credit card which uses a deposit you make as the credit limit.
  • Commit to Full Payments: If you do use a credit card, pledge to pay off the full balance each month, sidestepping interest charges.

6. Seek Professional Advice

  • Find a Financial Planner: Professionals can help streamline your budget, recommend investment opportunities, and provide strategies tailored to your situation.
  • Attend Counseling: Post-bankruptcy counseling can offer insights into managing finances better and avoiding potential pitfalls.
  • Utilize Non-Profits: Many non-profit organizations provide financial counseling services at reduced rates or even for free.

7. Live Within Your Means

  • Distinguish Wants from Needs: While a brand-new car might be tempting, a reliable used vehicle could serve the purpose without straining your budget.
  • Opt for Quality: In some cases, investing in high-quality items that last longer can be more cost-effective in the long run than frequently replacing cheaper ones.
  • Adopt Minimalism: A minimalist approach to spending can be both liberating and financially beneficial for making smart financial decisions.

8. Stay Informed About Financial Opportunities

  • Join Financial Forums: Websites like Bogleheads or Reddit’s r/personalfinance can be treasure troves of advice and recent financial trends.
  • Stay Updated: Global economic shifts, new tax laws, or changes in interest rates can influence your money. Regularly read financial news or use apps that provide summarized updates.
  • Networking: Surrounding yourself with financially savvy individuals can lead to beneficial advice and tips.

9. Set Clear Financial Goals

  • Short-Term vs. Long-Term: Have a mix of short-term goals (like saving for a vacation) and long-term goals (like purchasing a home).
  • Visualize: Create vision boards or charts to keep track of your financial goals, making them more tangible.
  • Review and Adjust: As life changes, your goals might too. Ensure they remain relevant and challenging.

10. Practice Patience and Persistence

  • Avoid Quick Fixes: Beware of schemes that promise rapid wealth. True financial stability is a gradual process.
  • Celebrate Milestones: Whether it’s paying off a particular debt or reaching a savings goal, take a moment to acknowledge your achievements.
  • Stay Resilient: Setbacks will occur. Instead of being disheartened, use them as learning experiences.


Bankruptcy, while a challenging episode, can serve as a potent lesson in financial prudence. As you step into this renewed phase, armed with experience and insight, you hold the pen to script a promising financial narrative.

By staying informed, disciplined, and proactive, the horizon ahead is not just about recovery and making smart financial decisions, but flourishing.


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Hiring an Experienced Bankruptcy Lawyer

It’s important to hire an experienced bankruptcy attorney as one of the steps to take when you’re facing bankruptcy and you need solid guidance and representation.

This is because there are many different types of bankruptcy. Only an experienced lawyer will know which one would work best for your specific situation and your particular financial decisions.

It might seem like it makes sense to do this yourself. But most people don’t have the time or patience to understand all of the intricate details involved in bankruptcy.

That means they make mistakes by not choosing the right type, or by not filling out paperwork correctly. Both things could lead to delays and ultimately hurt your chances of getting any debt relief at all.

This is not a journey to take lightly, but it is also not one to take alone. So, if you need to file for bankruptcy, reach out to us today to start your journey with us.

To learn more about the options you have and the steps to take, call us for a free consultation.


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Parker and DuFresne