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Never co-sign for anyone.
If you have just filed for bankruptcy, you will not be able to eliminate debt under Chapter 7 for eight years. Therefore, any co-signed loan that goes bad will very likely result in a judgment against you.
The risk is simply not worth the reward. You may not receive an option to co-sign for a few years after filing, but when the option becomes available, you must avoid it.
Never intentionally carry a credit card balance.
I know, this feels almost impossible. However, in a world where many of us live paycheck to paycheck, the extra money used to pay credit card balances is often the straw that breaks the camel's back. Remember, 85% to 90% of all bankruptcy filers do so because of incurring costs from loss of employment, illness or divorce. If you don't have a balance, should something terrible happen, you will have the financial cushion to help you cope.
It's a tough habit to get into, but paying your balances each month is a great way to save money and provide for yourself in case of emergency. If you are faced with a balance, do everything in your power to stop using the card and pay on the balance until paid off.
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Some people are deadbeats. Some people run up their credit cards to support a drug habit. You need to make sure others understand that you are not one of those people, that you have legitimate reasons for filing. You want to have a specific reason -- to be stated in less than 20 seconds -- that says why you filed for bankruptcy.
More often than not, you will find people more willing to work with you when you have been honest, they see in your face your remorse and they understand that your reason for filing was something out of your control.
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Video: The cure for the middle class crunchIt's not your imagination -- there is a squeeze on the middle class. MSN Money's Liz Pulliam Weston explains how it's possible for anyone to get in the middle class -- and stay there.
Even if you tend to be a negative person, you need to believe that you can get on with life and recover from bankruptcy. I have seen people who are so psychologically devastated after filing bankruptcy that they do not re-establish their credit for years. The result is that it takes them five to 10 years to begin improving their credit score when it only needs to take two years. Please avoid the ostrich approach to life after bankruptcy in which you stick your head in the sand and hope things work out. You must take the aggressive approach, knowing that you will encounter rejection but eventually find success. If you work hard and start immediately, you will soon reach a point where your credit will be strong.
This article was reported and written by Justin Harelik for Bankrate.com.
Updated Nov. 26, 2008
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