Bankruptcy is not a decision that should be taken lightly. There are some major financial repercussions involved and your financial freedom will be restricted for years to come. This doesn’t mean that filing for bankruptcy is the end of the world though. It should really be considered as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy each year and a lot of them are able to buy homes, cars and obtain credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will undoubtedly give you insight into making better financial decisions in the future.
Basically, once you have declared bankruptcy, you surrender control of your finances and assets to a Trustee for protection against potential lawsuits that could be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which signifies that the financial limitations you sustained during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aspires 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 only if you request permission from your Trustee. To do this, you’ll need to supply a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel internationally without prior permission from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to at least five years rather than 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 variety of loan providers. The main reason behind this is that you won’t have the ability to file for bankruptcy again for a long period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. In certain situations, obtaining a loan and making timely repayments will help improve your credit score, which will help you in the recovery process. But be careful, you don’t want to take every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again instantly. The trick is to rebuild your credit history gradually.
Buying A Home Is Definitely Possible
There’s a standard misconception that once you declare bankruptcy, you will no longer have the ability to secure credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a poor credit history, you can still buy a home if you manage to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you display a responsible use of credit. Naturally, you won’t have the capacity to obtain a home loan straight after you’re discharged, so it’s essential to build your credit history intelligently before even contemplating securing a home loan.
Check Your Credit Frequently
Most financial specialists advise that discharged bankrupts should check their credit report about twice a year. After initially declaring bankruptcy though, it’s critical that you inspect your credit report monthly for at least the first 6 months into your bankruptcy. A number of creditors may still be demanding 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 critical that you monitor your credit report to ensure it’s accurate and up to date.
Even though bankruptcy isn’t the ideal position to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial restraints 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. Securing a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Thus, it’s imperative 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 should be taken into consideration to ensure a smooth recovery process. If you’re contemplating filing for bankruptcy, get in touch with Bankruptcy Experts Hobart on 1300 795 575 or visit their website for more information: www.bankruptcyexpertshobart.com.au