Of the many financial decisions to make in a lifetime, declaring bankruptcy is one of the hardest. It comes with steep penalties, potentially losing some of your assets, and can be difficult to go through.

Whether you declare Chapter 7 or Chapter 13 Bankruptcy, you can come back from filing for bankruptcy and get back to a stable financial position. With a clean slate and some smart financial moves, you can rebound from bankruptcy.
 

Is it Chapter 7 or Chapter 13 Bankruptcy?
 

Your path forward from bankruptcy will have a lot of the same steps, but the first ones are regarding what type of bankruptcy you declared. Each one has its own benefits and consequences.

With Chapter 7 Bankruptcy, also known as a liquidation bankruptcy, you will likely be required to sell off some of your assets to meet a portion of your debts. Many important assets, like your home, car, and retirement accounts are exempt, but most others are subject to being sold. Going forward with Chapter 7, you should comply with any rules regarding selling of assets and do what is required to meet the determined payable amount.

Chapter 13 Bankruptcy doesn’t require the selling of assets, but instead is a means to restructure your debts. Likely, you will be required to pay off a portion or the full amount of your debts within three to five years. Failure to pay these debts can lead to creditors seizing your assets.
 

Make a Plan with Your Fresh Slate
 

Bankruptcy can mean a fresh start, whether it's getting rid of your debts or planning on paying them off in the next few years. This opportunity is not one to  waste. Even before filing for bankruptcy, you should start planning on how you're going to move forward and avoid the same mistakes.

A great place to start is by looking over your past and what led to bankruptcy. Did you take on too much debt too quickly? Did you not have enough in savings to pay for a major and unexpected expense? Was it something out of your control or just poor planning? Learn from your past and then plan for it to not happen again.

If you need help with financial planning, don’t worry, there are resources to help. Pioneer members get access to free financial counseling through GreenPath Financial Wellness. They can assist with financial planning and debt relief.
 

Maintain Your Job and Home
 

As you deal with your bankruptcy, you need to protect your income and assets, including your home. It can be easy to get swallowed in filing and dealing with bankruptcy, but your income is very important. It is your lifeline to a better life and you need to make sure it’s doing well. Make your job a priority and don’t get distracted.

You should also protect your assets. Sometimes, debt collectors will make claims like you need to sell your home or other protected assets to pay off the debts. While going through a bankruptcy, you’ll want to avoid unnecessary expenses, so keep your assets like your home and car in good shape.
 

Start Working on your Credit
 

A bankruptcy will wreck your credit score. If you’ve reached the point of needing a bankruptcy, it’s likely your credit has already gone down, but a bankruptcy can ensure your credit score is low for a while. 

After bankruptcy, building back up your credit needs to be a priority. Even though bankruptcies can last on a credit report for seven to ten years, every little positive mark on your credit can help.

Likely, many credit building avenues may be closed, including opening a new personal loan or a new credit card, but you aren’t without options. Pioneer offers a Credit Builder Loan that can help build your credit and save some money. It won’t fix your problem, but can get you back on the right path to raise your credit score.

Open a Credit Builder Loan