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During the recession, many Americans had issues paying their bills due to job losses and may have even faced foreclosure proceedings. Bankruptcy is often a last resort that people turn to when it’s clear that their personal debt has reached a crisis level. However, many people wonder what happens after the case is discharged.

The first important thing to do to start rebuilding a financial life is by opening a checking and savings account. Check local banks and credit unions for the best interest rates and lowest fees. After that, it’s time to apply for a secured credit card. This is the type of card that requires the user to make a cash deposit to back up the credit limit, so it’s much like a debit card. The plus of a card like this is that the credit card company reports payment history to the credit bureaus. After a few months of good payments on this card, try to get an unsecured card from a department store or a gasoline company. It’s also a good time to start putting money into a savings account, because about 24 months after the bankruptcy is discharged is an excellent time to apply for a mortgage.

Another important step in recovering from bankruptcy is paying new bills on time. It’s one of the single best things for a credit rating. It’s also a good idea to get copies of all the credit reports and dispute information that isn’t correct. It’s common to find incorrect information on credit reports after filing for bankruptcy. For example, some bureaus may continue to report the bankruptcy after it should have dropped off the report.

Bankruptcy is sometimes the best way for an individual to get a fresh financial start. A bankruptcy attorney may be able to review a debtor’s financial situation and make suggestions on which chapter of the Bankruptcy Code meets his or her needs.

Source: Consumer Affairs, “Starting over after bankruptcy“, Mark Huffman, May 17, 2013