There’s no doubt that are some considerable financial repercussions in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this scenario, don’t be alarmed. The difficult economic times witnessed today means that more and more individuals are declaring bankruptcy. Actually, there are about 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s important that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some changes need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after filing for bankruptcy.
It’s normal for those who declare bankruptcy to feel emotions of failure, self-loathing and remorse. While it may seem natural have these thoughts, becoming bankrupt is the result of simply another mistake that we all make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the very first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Addressing your financial issues is the first step in overcoming them, so you’re actually in a better position than you were before declaring bankruptcy.
It’s essential that you explore the reasons why you became bankrupt to make sure that 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. Even though there’s probably a number of reasons why you declared bankruptcy, all of them probably pertain to poor spending and borrowing habits. So it’s a smart idea to produce a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these oversights again.
Create a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to make a realistic and achievable budget. You’ll need to look at your income and expenses carefully, and formulate a way to save money while still paying all your living expenses. Even if it means that you downsize your house or relinquish some luxury items, becoming financially healthy is your primary priority. There are some easy ways to save money, like eating at home rather than dining in restaurants 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 initial step in repairing your bad credit rating is to make sure that you pay all your bills on time. Whilst this won’t improve your credit rating immediately, it will ensure that your rating doesn’t go down any further. You might prefer to set up automatic bill payments with your bank to ensure that you don’t miss 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 considered as the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t already got consistent employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will allow you to increase your liquid assets, providing you with more possibilities. If you’re in a position where you can acquire a weekend job, you should seriously consider it. Or take a look at your hobbies and aim to come up with a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is a great idea.
While declaring bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s vital that you reflect on the reasons that caused your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating progressively, and following a budget is paramount. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Hobart today on 1300 795 575 or visit www.bankruptcyexpertshobart.com.au