There’s no doubt that are some heavy financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this situation, don’t be alarmed. The challenging economic times witnessed today means that a growing number of people are declaring bankruptcy. As a matter of fact, there are roughly 20,000 Australians each year that declare 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 adjustments 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 typical for those who file for bankruptcy to feel feelings of failure, self-loathing and regret. Even though it may seem natural have these emotions, 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 very first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you give in to these negative feelings, the longer it will take to recover. Addressing your financial difficulties is the first step in overcoming them, so you’re already in a better position than you were before declaring bankruptcy.
It’s crucial that you examine 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 possibly a number of reasons why you declared bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these oversights again.
Create a budget
Once you’ve bounced back emotionally from bankruptcy, the next step is to develop a rational and attainable budget. You’ll want to examine your income and expenses thoroughly, and figure out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or forego some luxury items, becoming financially healthy is your leading priority. There are some practical ways to save money, for instance eating at home instead of dining in restaurants and cancelling 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 ensure you pay all your bills on time. While this won’t increase your credit rating immediately, it will ensure that your credit rating doesn’t drop any further. You might prefer to set up automatic bill payments through your bank to guarantee 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 considered the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got steady employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will allow you to increase your liquid assets, providing you with more choices. If you’re in a situation where you can get a weekend job, you should sincerely consider it. Or take a look at your hobbies and aim to create a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a fantastic idea.
Whilst declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you review the reasons that resulted in your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Port Macquarie today on 1300 795 575 or visit www.bankruptcyexpertsportmacquarie.com.au