If you are struggling with an overwhelming amount of debt, filing for bankruptcy may provide a chance for you to start fresh and regain control of your financial situation. Once you go through the legal process of filing for bankruptcy in Wisconsin, you may wonder how long it will take to become financially stable again.
According to Forbes, lending statistics from 2017 show that over 60% of people who filed for bankruptcy were able to develop a credit score of 640 or above within two years. Your financial circumstances and the details of your bankruptcy filing may affect your recovery process. However, good planning and sound financial decision-making often can help you recover from bankruptcy in just a few years.
- Reestablishing your financial priorities
One of the most important parts of recovering from bankruptcy is recognizing how it happened. For example, irresponsible spending habits may have led to credit card debt. In this case, limiting your discretionary purchases could help in the future. If your bankruptcy came from other sources, such as medical bills or student loans, discharging the debt may give you the chance to start over.
- Building up credit responsibly
Applying for a secured credit card following bankruptcy may be a step toward rebuilding your credit profile. This type of credit card typically requires a deposit to establish a credit limit. Using a card to make small purchases and paying the statement in full every month may improve your credit rating.
- Monitoring your finances
Having the right information can help you avoid future financial problems. Budgeting and tracking purchases reduce the risk of getting into debt again. A credit monitoring service can offer insight into what affects your score.
Bankruptcy may offer you a new beginning, allowing you to regain your financial stability through responsible choices. Making a budget, tracking your credit score and avoiding unnecessary purchases are a few ways to make a quick financial recovery.