Can you prevent a second bankruptcy?

On Behalf of | Dec 31, 2021 | Bankruptcy |

Filing for bankruptcy in North Carolina can give you an opportunity to reset your finances. If utilized carefully, this resource can enable growth and improve your situation.

Identifying the root cause of your financial distress can help you make changes to prevent a second bankruptcy.

Rebuild a foundation

Your bankruptcy could have stemmed from a variety of reasons including unexpected medical calamities, debilitating credit card debt and shoddy investments to name a few. Regardless of why you chose to declare bankruptcy, rebuilding your finances from the ground up can help you correct discrepancies.

Considering you have virtually started over; you will want to exercise an abundance of caution when you spend money. One strategy that Money Crashers suggests is to implement an all-cash budget. While you reestablish control of your finances, use only cash to purchase necessities. Over time, reintroduce a debit card. Finally, you may consider using credit cards again, but only when you know you have ample resources to make timely payments.

Retain control

As you regain confidence in your ability to manage finances, you may want to start looking for ways to expand your wealth. However, think carefully about how you diversify your savings and how you choose to spend your money. Investing can have valuable benefits if leveraged the right way. Similarly, credit cards can enable you to rebuild your credit and establish a reputation with lenders when used responsibly.

Working with an attorney is another way you can reduce your chances of filing for bankruptcy a second time. A legal professional can help you understand the conditions of a second filing, as well as suggest ways to prevent the negative ramifications of bankruptcy from disrupting your goals for the future.