The year 2020 was financially devastating for many citizens. If your finances have been so damaged that there is no way out, bankruptcy can greatly reduce your stress levels and help you focus on a path back to financial health.
These are the basic financial skills everyone needs to have. It will help you create the roadmap for your future. When you've looked through this financial planning list, you can create additional savings and security plans.
Become a submission expert:
Once you've made the decision Register for bankruptcyYou will likely need to work with a bankruptcy administrator for the best results. While there are DIY bankruptcy packages out there, the risk of missing a step can ruin your bankroll for years to come. So be ready to hire someone to move on.
One of the best things about having a professional by your side is that you have a lawyer. This specialist will help you by:
- Sending letters
- Response to creditors
- Reduction of phone calls and threatening letters
You can route calls and other issues straight to your bankruptcy team, giving yourself a little time to work on the challenges you face.
Go back to cash:
For the first month after your submission, consider using cash again for as many purchases as possible. When you need groceries, make a list with an estimated price for each item. Take out enough cash for your list and taxes.
Carrying cash is extremely powerful. Whenever you find something for sale, you need to quickly decide what to cross off your list or pick up next time. With cash in hand, there's no risk of the embarrassment of your card getting rejected.
Create a budget:
It is one of the essential subjects of financial planning. Sit down with your credit card statements, check book, and bank statements to see where your money is going. There are things you have to pay for including
And they need a line item on your budget. Having some joy in your life is also very important, so make a list for yourself too
- Entertainment of your choice
- Take away or in the restaurant
If your budget is tight, you may need to cross things off the second list. However, the goal of a budget is to have a structure that covers your basic needs and the activities that you enjoy.
Build an emergency fund:
Schedule a $ zero spending weekend to kick off your emergency fund. This means planning meals and activities for ten days on Thursday morning. Do your shopping that evening so your closets are full and you don't have to go out for ten days.
Take a look at how you spend your time in these ten days. Do you love going to the movies or is it the entertainment and family time that you like? Do you like to go out to eat or is it just nice to let yourself be pampered?
It can be instructive to find out what kind of activities you really enjoy that cost more than your base budget on those ten days of no-spending. With those funds, you should take $ 20 to the nearest dollar store and stock up on supplies like soaps, toothpaste, and cleaning supplies. Stick to your cash buying habit and see how much cheaper your trips are just buying groceries. Put the money you need to invest in now Emergency savings and plan another zero dollar spending weekend.
Make a habit of doing credit checks:
Once you are three months after the filing date, check your credit rating. Look for mistakes, but also for items that are still in collections, and bring them to the attention of your bankruptcy trustee. These expenses should gradually drop out of your report, or you should see a reduction as your bankruptcy team renegotiates terms.
Many financial experts recommend that we have six months of living expenses in our emergency fund. While that's a nice destination, it's important to point out that much of the financial devastation caused by COVID-19 began in early 2020 and we're not out of the woods yet. Even that ideal may not have been enough. Don't worry about your decision to file for bankruptcy protection.