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Nov 28
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After Bankruptcy: How to Establish Responsible Financial Habits

By Financial Tips, Personal Finance No Comments

The reality is, life after bankruptcy completely depends on your attitude.

Life after bankruptcy can look many different ways. For some, it is a scary time where money is tight and it seems like you are still trying to dig out of a bottomless hole. For others, it is a time of hope and opportunity; a chance to start again. The reality is, life after bankruptcy completely depends on your attitude. If you want to get your financial situation back on track and build good habits that foster financial stability, all you have to do is make a plan and stick to it. Staying disciplined can be challenging and stressful, but when you establish responsible financial habits after bankruptcy, you give yourself a chance to reach financial freedom again. Here are the best ways to do just that, from the Auburn & Opelika bankruptcy law experts at David S. Clark.

DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Need Bankruptcy Help? Call David S. Clark

Create a Realistic Budget

One of the most intuitive and important steps in establishing healthy and responsible financial habits following Chapter 7 or Chapter 13 bankruptcy is to create a budget, and stick to it. The act of simply creating a budget for your spending habits means nothing if you don’t stay disciplined and follow the budget. 

Some important aspects of building a budget include knowing your regular income, knowing your regular expenses, tracking your spending, and setting realistic, achievable goals. Planning for a budget requires commitment and consistency, whether you are old school and want to take the approach of allocating envelopes for monthly expense categories, or want to use more technologically advanced methods, your budget will only serve you as well as you let it. For a more detailed look at making a budget, click here.

Start Saving Money & Create an Emergency Savings Fund

An obvious step in the right direction for those recovering from bankruptcy is to prioritize saving money. Emergency savings funds are important to have, and in addition to said emergency savings funds, it is very important to be regularly putting money away for the future, even if there aren’t any looming financial crises on the horizon. Open a savings account and start earning interest. Make it an absolute priority to live below your means. This is an essential fiscally responsible practice for anyone looking to have a healthy financial future. 

Apply for New Lines of Credit

Applying for new lines of credit after Chapter 7 or Chapter 13 Bankruptcy is also an important step to take. Although interest rates may be higher following bankruptcy, it is still important to begin building back good credit. It may take an extended amount of time before you are approved to open new lines of credit post-bankruptcy, but once you can, it is absolutely recommended that you do so. 

Credit builder loans, which are intended to help you rebuild credit following bankruptcy, are another great way to start rebuilding a healthy credit score and positive financial practices. Also, consider obtaining a secured credit card, which is backed by the balance in your savings account. This balance determines your credit limit, making it a safer option than using traditional credit cards.

Make Payments on Time

In order to keep building credit and instilling responsible financial habits, making payments on time is crucial. By avoiding late fees and paying your bills on time, or earlier, you will not only be building credit, but you will also be saving money! Timely payments cannot be overlooked as a critical part of being financially responsible after bankruptcy. Without this, you can face even higher interest rates, which can be crippling when trying to rebuild financial security. 

Keep a Low Credit Card Balance

Keeping a low credit card balance is a simple, effective way to maintain responsible spending habits. Monitoring your credit utilization ratio and keeping it low will help creditors see that you are making responsible financial decisions. Keeping your credit utilization ratio means that you are not using your line of credit up to its limit. Setting spending limits for yourself– and sticking to them– will help you establish responsible financial habits.

Avoid Quick Loans

Quick loans, where individuals can almost always receive cash, involve incredibly high interest rates, and often trap financially vulnerable individuals in another cycle of debt following bankruptcy. Though they can be tempting when payments are due and cash is short, find safer and less predatory solutions. 

Some examples of better ways to solve a cash shortage include borrowing from a church or nonprofit, or finding additional short term streams of revenue, like online sales or third-party food delivery services. There are many ways to make an honest dollar these days that only take a little time. Read here to learn more financial tips and alternatives to quick loans.

David S. Clark, Auburn & Opelika Bankruptcy Attorney

From his many valuable years of experience serving the Auburn and Opelika, Alabama community, David S. Clark is knowledgeable and prepared to help you start your journey back to financial security. If you need help navigating the stress, intricacies, and complexities of Chapter 7 or Chapter 13 Bankruptcy, contact David S. Clark, Attorney at Law today!

DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Jul 12
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How to Rebuild Credit After Bankruptcy

By Financial Tips, Personal Finance, Understanding Bankruptcy No Comments

Unfortunately, life after bankruptcy isn’t easy. You have a fresh start, but you also have a lot of repair work to do with your credit, which has most likely taken a huge hit during the process. The good news is that any Auburn or Opelika resident has the ability to not only rebuild but fully recover from bankruptcy. 

Here are some financial tips from David S. Clark, an experienced Auburn & Opelika bankruptcy attorney, on how you can improve your credit score after filing for bankruptcy. 

DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Need Bankruptcy Help? Call David S. Clark

Understanding Your Credit Score

The first step to rebuilding your credit is understanding what your credit score really is. In the most basic of terms, a credit score is a number that reflects your trustworthiness with lines of credit. This number is calculated using the total amount of debt owed, payment history, any and all credit history, amount of credit lines, the amount of diversity in credit, and more. 

It is important to know the state of your debt and finances so you can carefully consider any decisions you make regarding your credit. Knowing where mistakes have been made and how to avoid future mistakes can greatly help the rebuilding process after bankruptcy. 

Check Your Credit Report for Inaccuracies

Credit reporting companies, also known as credit bureaus, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies.

Many of the major lenders provide access to this information for free in the form of credit reports. It is important to note that there are a few different major lenders, so reporting from each can vary.

After receiving your credit report, check that the items on the report are accurate. While most of the financial information will be correct, lenders can make inaccuracies that lead to unfairly low credit scores.

If you’re an Auburn or Opelika resident seeking help, David S. Clark is an experienced bankruptcy attorney that can not only walk you through your credit report but help assist you in disputing any inaccurate information. 

Apply for New Lines of Credit

An important step to take after filing for Chapter 7 or 13 bankruptcy is to apply for new lines of credit. It might be difficult to be approved for a new line of credit, and interest rates may be higher than before, but do not be discouraged!

New lines of credit can help lenders see that you are someone who is responsible for the money you borrow, despite your previous financial history. These new lines of credit can rebuild trust and confidence in your ability to repay debt. 

Be On-Time With Payments

Now that you have your new lines of credit, you will need to prove that you are responsible for them. One way to do this is to make your payments in a timely manner. This means avoiding late fees and generally paying your bills on or before their due date.

Keep Balances Low

Keeping your credit card balance low gives you a low credit utilization ratio. This ratio is an important factor to lenders when assessing your eligibility for lines of credit and especially when assessing your credit score. 

A low credit utilization ratio means that you are not using your line of credit up to its limit. This gives lenders confidence that you will not max out credit cards and be unable to pay them back. 

David S. Clark, A Local Bankruptcy Attorney

David S. Clark is an experienced bankruptcy attorney who understands the complications of life after bankruptcy. If you need help navigating Chapter 7 or 13 bankruptcy, contact David S. Clark today! 

DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Dec 09
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Financial Tips From an Opelika Bankruptcy Attorney

By Attorneys & Lawyers, Personal Finance, Understanding Bankruptcy No Comments

One of the most common reasons that individuals fall into a financial crisis and decide that bankruptcy is the best option for them is poor financial stewardship, specifically when it comes to credit.

Though medical expenses and job loss are ranked higher than poor personal finance for reasons that people file for bankruptcy, those two issues are far more dependent on outside forces than personal financial responsibility.

Given that each person is the most important player in their own financial stewardship, we want to give our clients, potential clients, and readers practical tips about how they can make better financial decisions in order to avoid bankruptcy.

DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Need Bankruptcy Help? Call David S. Clark

Tip #1: Control Your Spending on Credit

People incur credit when making a purchase that either costs more than the cash they have on hand or more cash than they want to spend at one time.

Incurring debt through credit is not always a bad thing.

For example, one of the most effective ways that Americans build personal wealth is through home ownership. Most people don’t just casually have $300,000 sitting in their bank accounts, so they take out a mortgage and purchase their home on credit.

Many, however, incur debt less strategically than for the purpose of building long-term wealth. They often incur debt on purchases that are much less important than a home–expensive cars, a TV, clothes, the newest iPhone, etc.

One of the major problems with excessive spending on credit is that people begin to run up credit card bills and have no realistic plan to pay off the debt in the coming months, years, or decades. Eventually, they default on the loan or miss one too many credit card payments and creditors come ready to make them pay their debts.

The best way to avoid finding yourself neck-deep in debt with unending calls from creditors is to manage your spending from the beginning. Unless you have a clear plan to pay back your debts and the discipline to stick to that plan, don’t purchase using credit.

Tip #2: Avoid Quick Loans

Often when individuals are short on cash and a bill comes due, they see no other option, but to go to quick loan, payday loan, title loan, etc. business in order to get the money needed to pay the expense.

The problem with borrowing money from these predatory establishments, though, is that they lend at extremely high interest rates. These companies usually lend to individuals who are already financially vulnerable. When these individuals begin to pay off the massive interest on the relatively small loan, they quickly realize that borrowing from a quick loan company was a mistake.

For more information on payday loans read our article, here.

A Few Alternatives to Quick Loans

Churches & Non-profits

For expenses like grocery bills, one-time rent payments, bus fares for a job interview, etc. local churches, other faith-based organizations, and community non-profits are often willing to help fit the bill.

Here is a list of Auburn/Opelika Churches.

Family Loans

Though it may take a bit of humility to ask, assistance from responsible family members can be one of the safest ways to borrow money and often at no or very little interest.

Alternative Sources of Cash

Now more than ever there are alternative ways for individuals to make a quick buck honestly and with no strings attached, like high interest rates.

Companies like Uber, DoorDash, and TigerTown To Go (an Auburn/Opelika company) are making quick, occasional sources of cash from actual work much easier to find.

David S. Clark, An Auburn/Opelika Bankruptcy Attorney

If you have followed these tips, yet still find yourself in a financial crisis, bankruptcy may be the best option for you. David S. Clark is an Auburn & Opelika bankruptcy attorney who helps clients throughout the entire bankruptcy process.

We can help you determine whether Chapter 7 or Chapter 13 bankruptcy is the best option for you. For a free case consultation, contact David S. Clark, Attorney at Law today!

DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

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