How to Avoid More Debt Problems After Bankruptcy Discharge

The purpose of filing for bankruptcy is to rid yourself of all of your debt problems. It's a clean start and walk away from your problems kind of deal. Key to your success is not getting yourself back into the problem you got into in the first place. It takes a long and critical look at your spending habits prior to bankruptcy to figure out why you got here to begin with.

When Easy Money Becomes not so Easy

Having a job that pays well means a lot of people also spend well. And that is, by and large, their downfall that led to their debt problems. A false sense of security gets created with the large salaries that come with a position thought to be indispensable. Reality is, corporations do not feel a sense of loyalty to their employees with expertise. That high paying job can become a liability when revenues are declining. Most times a business would rather rid themselves of that piece of payroll entirely as opposed to cutting it back or renegotiating to a lower pay. This results in the employee all of a sudden being unemployed with a large debt load that they can't handle.

Ask Yourself Why

Why did you spend all of that money? Why wasn't some of it saved with the occasional large purchase being considered as a reward? Why buy all of those items that you really didn't need? The answer will be, because you could. And that's really not a good answer. This attitude is what brought you to the point of needing bankruptcy. Consider all of the money that was spent on items that you could really live without, and could have saved instead. Do the math, as much as it may hurt. It will demonstrate in black and white just where you went wrong.

Breaking the Habits

Your spending habits are what brought you into bankruptcy. These habits must be looked at closely. Do you really need to buy that item? No? Then put it back on the shelf. Chances are it will still be there when you have a little extra to spend and would like to own it. Stop thinking that you must have it now because you really don't. What you need now is a roof over your head, transportation for a job, food on your table, and the utilities paid. Anything left over at the end of each month should be going into an interest bearing account. It will take some self discipline to achieve this, but it must be done to avoid falling into the same traps.

Fiscal Discipline and Budgets

Your life has changed, and so must your spending. Look at all of the little things you purchase during a week that you may not really need and add up how much they cost. One of the most common items to eat a hole in your wallet is buying coffee at a popular chain. It can cost up to $50 a week, depending on how often you go and what you purchase. Doing the math means that it can potentially cost $200 a month and $2400 a year that is being consumed. Compare that with the cost of ingredients to make the same exact beverage and keeping it in a thermos for the day. Stop going to the coffee house, and throw the dollars into a jar and then put them into savings. You'll be surprised at how fast it will build.

The other part of success is to make a budget and stick to it. Start by writing down your monthly income, then your monthly bills and expenses. Compare what's coming in and going out. Eliminate or cut back on unnecessary luxuries. For example, if you have the most expensive TV package and you don't watch all of the premium channels, eliminate them from the line up. Be more frugal and discerning at the grocery store. This doesn't mean you have to give up on the better foods for your kitchen. Just consume less of it and stretch it out. It cannot be stressed enough to learn to live within your budget. Eventually you'll get used to the idea and will wonder how you ever lived without one.

How an Attorney Can Help