Declaring bankruptcy is one of the hardest things you can do. And, if you’re a newlywed, it puts a lot of pressure on your fledgling relationship.
Luckily, bankruptcy isn’t the end of the world. Yes, it’s a challenge, but you can survive it.
Whether you’ve recently declared bankruptcy, suffering the aftereffects, or just starting on the path, here is a survival guide specifically for newlyweds.
Don’t Beat Yourself (or Each Other) Up About It
One of the biggest hardships of bankruptcy is the emotional toll. You may feel like a failure or an idiot. If you fell for a scam or made a poor choice, then you may be angry too.
While you don’t want to suppress your feelings, you also need to make sure you don’t wallow in them. Additionally, you need to make sure your partner doesn’t either. Otherwise, you’ll keep punishing yourself, and that won’t help you move forward.
Create a Post-Bankruptcy Plan
Filing for bankruptcy does a number on your credit. Plus, the black mark sticks with you, dragging down your score for years.
This means you need to create a plan to repair some of the damage. Regretfully, there’s no quick fix. However, there are things you can do.
For example, consider getting a secured credit card. You have to put a cash deposit down up front, but it gives you a functioning that appears on your credit report. If some of your debts weren’t discharged, make sure to pay them on time.
Also, actively monitor your credit reports. That way you can spot problems early, giving you a chance to handle issues before they do further damage.
Craft a Functional Budget
Usually, people filed for bankruptcy after they get in over their heads. To keep that from happening again, you need a functional budget.
List out all of your regular expenses, allocate funds for food, gas, and other costs, and plan to add money to emergency savings. Also, make sure to fund your retirement accounts. Otherwise, you may have trouble in the future.
Then, make sure you stick to your budget.
Every so often, you may need to reevaluate your budget, especially if you have a change in income or regular expenses.
Know Your Rights
In some cases, creditors will try to recover a debt even after it has been discharged. It’s important to know that these attempts are typically illegal, and there are laws to protect you.
Similarly, there are restrictions regarding how legitimate creditors can contact you, even if you owe a debt.
Some protections vary by state, so you may need to explore local laws to find out what you can do. However, if a creditor is hounding you, it’s worth exploring your options.
Ultimately, going bankrupt is hard, but you can recover. Just stick together and follow the tips above, and you can make it to the other side.
Have you ever faced bankruptcy? Have some survival tips? Tell us in the comments below!
Looking for more great articles from Newlyweds on a Budget? Give these a try:
- How to Get a Live Person at the IRS
- How Much Money Do You Need for an Emergency Fund?
- Living the Moment But Planning for the Future: Spend and Save Strategies for Young Couples