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Keeping your financial freedom after bankruptcy

There are many different methods for getting back on financial track after you file for bankruptcy. While you are in the midst of the process, you will have to live on a cash budget. Once the court discharges the case, you have to determine what type of financial lifestyle you are going to live.

You have two primary options. The first is that you can continue to pay for everything with cash. The second is that you can start to build your credit again. No matter which one you choose, you have to act responsibly with your finances.

First, make a budget. You probably started one when you were in the bankruptcy process, but you need to update it. This lets you know exactly what money have coming in and going out so you don't overwhelm yourself.

Slowly establish credit. Even if you don't plan on using credit for small purchases, having a positive credit history can be beneficial. For example, some insurance companies pull credit scores as part of determining the rate. Open a prepaid card, make small charges, and pay the bill on time.

Remember this takes hard work. There are companies that will try to charge you an upfront fee to rebuild your credit, but you can do this on your own for much cheaper.

Take care of yourself. Going through a bankruptcy is stressful. Once you know that you have done everything necessary, you can take a little time out for yourself.

It is always best to get your finances in order as quickly as possible. If you are starting to realize that you won't be able to tackle your debt, now is the time to act.

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