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4 Secrets to Jump Start Your Financial Recovery

Do you need to start over when it comes to money? It’s easy to borrow money and a lot harder to pay it back – a lesson too many people have to learn when it’s too late. The good news is, you’re not on your own. Professionals like licensed bankruptcy trustees can help you find debt relief and find your financial footing once more.

You can recover your finances and get debt relief with the help of a licensed bankruptcy trustee. Not only are they the only professionals who administer debt relief programs like bankruptcy and consumer proposals, but they also provide credit counselling sessions as part of debt relief, where you’ll learn how to put some of these tips into practice.

1) Get Out of Collections

When you have an account in collections, it damages your credit score. Collections are reported on your credit report and negatively impacts your score, just as a bankruptcy would. If you want to recover your finances, you need to start with debt relief.

Consumer proposals and bankruptcies stay on your credit report for a number of years, depending on where you live. But they provide debt relief: reducing the total amount you have to pay and stopping collection actions. You can hit the refresh button and then take some of the steps below to set yourself up for success.

2) Learn How to Budget

Budgeting is an everyday practice that keeps your spending under control and makes sure you’re not living beyond your means. There are tools you can use to track your spending. Once you know where your money goes, you can decide where to cut back and save.

As you get out of debt, you want to keep a close eye on your spending, but as budgeting becomes more familiar, you’ll naturally become more careful with your money.

3) Change Your Financial Habits

There are a few key changes you can make that will turn your finances around and ensure you’re less likely to face insolvency problems again. These include:

  • Paying your bills in full and on time without exception. You can avoid forgetting about bills by automating payments. Payment history is one of the biggest factors in your credit score.

  • Only make purchases you can afford. It can be tempting to stretch your purchasing power beyond your income for a vacation or new furniture. However, financing furniture or putting travel on a credit card makes it much more expensive than the original price.

  • Building an emergency savings fund that you can dip into if you face unexpected expenses.

4) Get a Secured Credit Card

Finally, you have to improve your credit history to prove that you’ve become a reliable borrower. But you need new credit to do so. One tool you can use to begin to establish a better credit history is a secured credit card.

You place a deposit on a secured credit card, which determines the size of your credit limit. Following a bankruptcy, your limit will not likely be much higher than the deposit, making it more like a debit card – but the important thing is that it counts as credit. Therefore, paying your bills on time and in full starts to change the pattern of your credit history.

You can start over. Debt relief offers you a clear-cut way to get out of debt. Credit counselling can show you how to get back into a better financial position.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes

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