Filing Bankruptcy? 5 Ways Financial Coaching Boosts Present And Future Success
Bankruptcy protection is an important safety net for anyone who has suffered a financial catastrophe or struggled with mounting debt over many years. But while bankruptcy can give you a fresh start, it can't guarantee that you won't fall prey to financial problems in the future. What can you do to ensure this never happens again? Add a financial coach to your bankruptcy-era team. Here are a few key things they'll help you with.
1. Maintaining a Workable Payment Plan
Do you plan to file Chapter 13, or reorganization, bankruptcy? If so, you will need to come up with your own proposed budget and payment plan amount for the court to approve. Your attorney can help with this, but they aren't a financial expert. Instead, a coach will help you analyze your income and expenses to create a workable plan. Then, they will check in regularly to make sure you stick to it.
2. Preventing Misuse of Credit
Many people end up in bankruptcy because they have inadvertently been augmenting their income with credit. This is a dangerous spiral. Getting out of it means learning how to use credit wisely and in a controlled manner, budgeting realistically, and learning to prioritize and develop self-control. Financial coaches specialize in these skills and will help you develop them.
3. Living Without Credit
During the bankruptcy case and for some time after exiting it, you may not have access to credit. This presents challenges in doing everything from buying groceries before a paycheck to replacing your broken car. Create a strategy to successfully live without drawing on credit for as long as you need to with professional assistance.
4. Building Savings and Emergency Funds
The best way to prevent future financial emergencies from becoming unmanageable debts is to build up a financial buffer. Financial coaches identify your goals and aid in coming up with a plan to reach them. They will also teach you to set short- and long-term goals as well as milestones to gauge your progress.
5. Facing Money Hang-ups
What is your relationship with money and did it contribute to your bankruptcy? Whether your spending reflects a past where you had no limits, one where money was always short, or one with parents who didn't manage money well, a coach will help you overcome these hurdles. Get a handle on the emotional component of money management with a seasoned professional.
Where to Start
Which of these services can make the most difference during and after your bankruptcy? No matter what your needs or goals are, start by learning more about financial coaching today. It may be the best investment you ever make. For more information on financial coaching, contact a professional near you.