Bankruptcy is not a decision that should be taken lightly. There are some taxing financial implications involved and your financial freedom will be confined for several years to come. This doesn’t indicate that filing for bankruptcy is the end of the world though. It should really be thought of as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy every year and the majority of them have the capacity to buy homes, cars and attain credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will not surprisingly give you insight into making better financial decisions in the future.
Generally speaking, once you have declared bankruptcy, you forfeit control of your finances and assets to a Trustee for protection against legal action that may 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 incurred 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 restraints of declaring bankruptcy is that you can’t exit the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll have to provide a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior consent from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Immediately
One thing that surprises plenty of discharged bankrupts is that they will immediately be offered credit by a wide range of creditors. The reason behind this is that you won’t be able to declare bankruptcy again for an extensive period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Sometimes, obtaining a loan and making timely repayments will help improve your credit history, which will help you in the recovery process. But be warned, you don’t want to take every offer thrown in your direction as some lending institutions are very dubious and include hidden fees and charges that can put you in debt again straight away. The trick is to rebuild your credit rating progressively.
Buying A Home Is Certainly Possible
There’s a typical misconception that once you file for bankruptcy, you will no longer have the capacity to acquire credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a bad credit history, you can still buy a home if you manage to rebuild your credit within a few years, you pay all your bills on time, and you demonstrate a responsible use of credit. Of course, you won’t have the ability to obtain a home loan straight after you’re discharged, so it’s essential to build your credit record wisely before even contemplating securing a home loan.
Check Your Credit Regularly
Most financial experts recommend that discharged bankrupts should take a look at their credit report at least twice a year. After initially declaring bankruptcy though, it’s essential that you inspect your credit report monthly for at least the first 6 months into your bankruptcy. A couple of creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to steer clear of any further difficulties, it’s paramount that you keep track of your credit report to make sure it’s correct and up to date.
While bankruptcy isn’t the most ideal position to be in, it doesn’t mean that your financial future is permanently limited. There are some serious financial restrictions imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Acquiring a mortgage and other credit lines will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Thus, it’s crucial that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to need to be taken into account to ensure a smooth recovery process. If you’re considering filing for bankruptcy, speak with Bankruptcy Experts Rockingham on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsrockingham.com.au