There’s no doubt that are some serious financial repercussions in filing for bankruptcy, and there’s no question that your life will encounter some considerable changes. If you’re in this position, don’t be alarmed. The difficult economic times experienced today means that an increasing number of individuals are declaring bankruptcy. As a matter of fact, there are approximately 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s vital that you look towards the future and aim to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some improvements have 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 individuals who declare bankruptcy to feel feelings of failure, self-loathing and guilt. Whilst it may seem natural have these emotions, becoming bankrupt is the result of merely another mistake that we all make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the initial step towards financial freedom, and recovering from a bad credit rating is less complicated 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 actually in a better position than you were before declaring bankruptcy.
It’s necessary that you examine the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Although there’s possibly a variety of reasons why you filed for bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a smart idea to make 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
Once you’ve rebounded emotionally from bankruptcy, the next step is to make a realistic and achievable budget. You’ll have to assess your income and expenses closely, and work out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or forfeit some luxury items, becoming financially healthy is your key priority. There are some simple 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 very first step in restoring your bad credit rating is to ensure that you pay all your bills on time. Though this won’t improve your credit rating instantly, it will ensure that your credit rating doesn’t decrease any further. You might choose to set up automatic bill payments through 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 the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got stable employment, now is the time to do so. Consistent income over time will not only increase your credit rating but it will enable you to increase your liquid assets, providing you with more choices. If you’re in a position where you can obtain a weekend job, you should honestly consider it. Or take a look at your interests and attempt to come up with a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a fantastic idea.
Though declaring bankruptcy is never an easy decision, it is the first step in addressing your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that created your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating eventually, and following a budget is extremely important. If you’re considering filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Rockingham today on 1300 795 575 or visit www.bankruptcyexpertsrockingham.com.au