Filing for bankruptcy can be one of the most difficult decisions you ever have to make. But you made a sound decision and yes, there is life after bankruptcy. Hopefully, you have learned from your mistakes and can now move on, starting with a blank slate and a chance to rebuild your credit score without falling back into your bad old spending habits. The bankruptcy filing will stay in your credit report for up to ten years and it is up to you to restore it back to what it used to be.

Show restraint

Do not succumb to credit card offers that try to lure you with promotional low or no interest rates. They are part of the problem. Limit yourself to one credit card with a smaller limit of no more than $2000. Be sure that only you have access to it and only use it in emergencies for unexpected big ticket items such as car repairs or urgent home repairs.

Make a budget

Make a monthly budget of what you need and can comfortably afford. If you have a mortgage, student loans and other fixed monthly expenses, calculate how much discretionary spending you will have after making these payments each month. Then make a budget of how much you will need for essentials such as food and household expenses. Set aside a certain amount to deposit into a savings account, even if it is only a small amount. It is a good habit to start. If you find that you are in the red numbers again once you paid all your bills, you will need to downsize to cut costs and afford your life.

Trim the fat

As one of the biggest expenses, the first place to look for downsizing is your mortgage or rent. Maybe your mortgage payments are not within your financial means. If this is the case, consider downsizing to a more affordable home. Smaller mortgage payments make a very big difference in your monthly budget. The other big expense that makes a difference is your car. If you need a car, look at smaller cars with good mileage to reduce your monthly gas bills. Try to save enough money for a 10-20% down payment of the purchase price of the car to lower the interest rate and increase your chances of getting the loan. Also consider dispensing with some tempting, costly but not necessary extras that can add substantially to the cost of a new car. Once you can cut these major costs, you will have more cash available for discretionary spending.

Build your credit

Before you apply for credit again, be sure to save enough for a sizable down payment whether it is for a smaller home or new car. Use your credit card sparingly and deliberately. But most important of all, pay all your bills on time, and in full each month.