Getting back on your feet after bankruptcy

Bankruptcy will have a big impact on your finances. Although once you’ve been discharged from bankruptcy (usually after 12 months), you’ll be out of debt and able to look forward to a new start, getting back on your feet financially probably won’t happen overnight.

Because bankruptcy remains on your credit file for six years, you may have difficulty when applying for certain financial services. For example, getting a bank account after bankruptcy could be difficult, as banks could decide to turn down your application once they find you’ve been bankrupt in the recent past.

However, there are ways you could improve your ‘financial health’ as a discharged bankrupt - and get into good money habits for the future.

Budgeting
One of the most successful ways of staying financially secure is by working out how your money is spent every month. Planning a careful budget can be the ideal way of keeping on top of the money you earn and where it all goes, and sticking to it could make all the difference between staying in control of your money and facing more financial trouble further down the line.

1. Work out your monthly income. This should include all the money you receive in your account, such as your salary, any benefits or grants you may receive, and things such as child maintenance payments.
2. List your total monthly outgoings. This should include all your priority expenses - so everything you have to spend money on from month to month: rent/mortgage, food, utility bills, and any other necessary expenses.
3. If you take your total monthly outgoings away from your total monthly income, you’ll be left with your disposable income. As long as you never spend more than this amount on other things, your living costs should be covered every month - and you won’t have to worry that you’re getting into debt.

Managing your money
There are many ways you could help yourself to stay in the clear with your finances. You may find it helpful to:

• Check your bank account on a daily basis so you always know how much money you have in your account at any time
• Set up Direct Debits for your monthly utility bills, so the money will leave your account exactly when it’s due
• Get a bankruptcy bank account - which could help you get back in control of your finances again, even if you have a bad credit history
• Register for internet banking so you can keep an eye on your bank account whenever you need to.