How to Avoid Bankruptcy Relapse

For many, bankruptcy is a once-in-a-lifetime solution to an unexpected debt crisis. Perhaps you overextended yourself in early adulthood or a medical issue cost far more than you were prepared to pay. Regardless why bankruptcy was necessary, it was a tool available to help you improve your situation and move forward with your life.

Unfortunately for some, financial struggles are an ongoing fact of life. Bankruptcy is used to resolve one phase of financial issues, but down the road many of the same issues arise again and bankruptcy is once again needed.

Statistics show nearly 30% of bankruptcy filing in 2011 were from people who had already filed within the previous eight years. With an economy that is just shuffling along with no major growth in sight, chances are that percentage is likely to hover around one-third for the foreseeable future.

Though bankruptcy can be a valuable resource to help you get back on track, nobody wants to relapse. It can be devastating to find yourself in the same hole that led to your initial bankruptcy, and it can leave you feeling desperate and alone.

Here are a few tips to help you avoid bankruptcy relapse:

Get a Handle on Your Budget

Begin by assessing your income and really looking at your budget and lifestyle. Chances are if you are just emerging from bankruptcy, you are beginning to regain control of your finances again. This can be overwhelming, but the most important lesson to learn from your bankruptcy experience is how to better manage your money. If you’re unsure where to begin, professional help is available. Understanding your income and making adjustments to ensure you are not overextended is one of the smartest things you can do to avoid financial struggles.


Carefully manage credit now that it’s available to you. It’s important to re-establish credit, but you don’t want to overdo it. Your goal is to live within your means and using credit excessively is a sign you are not doing so.

For more information on how consumer credit works, visit the Federal Trade Commission’s website.

“Pay” Yourself First

Saving needs to be an important priority in your post-bankruptcy life. Aim to put at least five percent into your savings account from each paycheck and treat this as if it is another bill. Make sure your debt obligations are met, but make sure you budget for savings before you budget for extra spending.

Embrace Your New Financial Attitude

You’ll learn a lot from financial struggles and from filing for bankruptcy. Now that you are moving forward and nearing the completion of a bankruptcy – or your bankruptcy is well behind you – it’s important to embrace this new financial lifestyle. Mistakes might have led to your bankruptcy, but you don’t need to repeat those same mistakes in the future. You are a brand new person with a brand new lease on your financial life – enjoy it!

If you would like to know more about how you can avoid bankruptcy relapse or you need to speak to someone about filing for bankruptcy for the first, second, or third time, we can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 for more information.


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