Bankruptcy is not a decision that should be taken lightly. There are some harsh financial repercussions involved and your financial freedom will be constrained for years to come. This doesn’t indicate that declaring bankruptcy is the end of the world though. It should really be regarded as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy every year and many of them have the ability to buy homes, cars and acquire credit cards after they’re discharged. Further to this, understanding what life is like after you have filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
In essence, once you have filed for bankruptcy, you forfeit control of your finances and assets to a Trustee for protection against litigation that might be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which means that the financial stipulations you suffered during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article tries to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the limitations of declaring bankruptcy is that you cannot leave the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll need to supply a lot of details relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior approval from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Straight Away
One thing that surprises plenty of discharged bankrupts is that they will immediately be offered credit by a vast array of loan providers. The reason behind this is that you won’t have the capacity to declare bankruptcy again for a lengthy period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In some situations, securing a loan and making timely repayments will help strengthen your credit history, which will help you in the recovery process. But be mindful, you don’t want to accept every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again immediately. The key is to rebuild your credit record steadily.
Buying A Home Is Definitely Possible
There’s a frequent misconception that whenever you declare bankruptcy, you will no longer be able to secure credit for a mortgage. This is definitely not the case. Although bankruptcy will leave you with a bad credit record, you can still purchase a home if you have the capacity to rebuild your credit within a few years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Naturally, you won’t have the capacity to acquire a home loan straight after you’re discharged, so it’s imperative to build your credit score wisely before even considering securing a mortgage.
Check Your Credit Frequently
Most financial specialists advise that discharged bankrupts should take a look at their credit report at least twice a year. After initially declaring bankruptcy though, it’s crucial that you look at your credit report each month for at least the first six months into your bankruptcy. Certain creditors may still be requesting payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to stay clear of any further complications, it’s essential that you monitor your credit report to make sure it’s accurate and up to date.
While bankruptcy isn’t the ideal position to be in, it doesn’t mean that your financial future is permanently constrained. There are some severe financial constraints imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Obtaining a mortgage and other lines of credit will be possible a few years after discharge if the recovery process is well-planned and executed. Consequently, it’s crucial that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to need to be considered to ensure a smooth recovery process. If you’re considering declaring bankruptcy, reach out to Bankruptcy Experts Wangaratta on 1300 795 575 or visit their website for more information: www.bankruptcyexpertswangaratta.com.au