There’s no doubt that are some substantial financial repercussions in declaring bankruptcy, and there’s no question that your life will encounter some considerable changes. If you’re in this scenario, don’t be alarmed. The difficult economic times witnessed today means that a growing number of individuals are filing for bankruptcy. In fact, there are as much as 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s crucial that you look towards the future and try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some adjustments have to be made to secure a bright future for you and your family. So here are several simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for individuals who declare bankruptcy to feel emotions of failure, self-loathing and remorse. Whilst it may seem natural have these feelings, becoming bankrupt is the result of merely another mistake that we all make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Facing your financial difficulties is the first step in overcoming them, so you’re certainly in a better position than you were before filing for bankruptcy.
It’s imperative that you explore the reasons why you became bankrupt to ensure you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in order, so it’s best you make the most of it. Although there’s probably a number of reasons why you filed for bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a good idea to produce a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these errors again.
Make a budget
Once you’ve recouped emotionally from bankruptcy, the next step is to make a rational and conceivable budget. You’ll need to consider your income and expenses thoroughly, and work out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or sacrifice some luxury items, becoming financially responsible is your key priority. There are some practical ways to save money, for instance eating at home as an alternative to eating out and revoking your gym membership in favour of walking to work. Always remember to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The 1st step in restoring your bad credit rating is to make sure that you pay all your bills on time. Although this won’t improve your credit rating immediately, it will ensure that your credit rating doesn’t decrease any further. You might want to set up automatic bill payments through your bank to ensure that you don’t overlook any payments. This will demonstrate to lenders that you’re financially responsible, and the longer you do this, the better your credit rating will get. This is regarded as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t presently got stable employment, now is the time to do so. Consistent income over time will not only increase your credit rating but it will allow you to increase your liquid assets, providing you with more opportunities. If you’re in a position where you can acquire a weekend job, you should honestly consider it. Or have a look at your interests and aim to create a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a great idea.
While filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you review the reasons that created your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating eventually, and following a budget is paramount. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Wangaratta today on 1300 795 575 or visit www.bankruptcyexpertswangaratta.com.au