There’s no doubt that are some substantial financial consequences in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this scenario, don’t be alarmed. The challenging economic times witnessed today means that more and more people are filing for bankruptcy. As a matter of fact, there are roughly 20,000 Australians every 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 will need to be made to secure a bright future for you and your family. So here are a few simple strategies that you can use to best recover after filing for bankruptcy.
It’s usual for those who declare bankruptcy to feel feelings of failure, self-loathing and guilt. Though it may seem natural have these emotions, being 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 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. Confronting your financial troubles is the first step in overcoming them, so you’re certainly in a better position than you were prior to declaring bankruptcy.
It’s crucial that you review the reasons why you became bankrupt to make certain 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. While there’s probably a range of reasons why you filed for bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a good idea to make a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these mistakes again.
Create a budget
Once you’ve rebounded emotionally from bankruptcy, the next step is to develop a realistic and manageable budget. You’ll want to look at your earnings and expenses carefully, and work out a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or do away with some luxury items, becoming financially stable is your primary priority. There are some practical ways to save money, such as eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The first step in repairing your bad credit rating is to make sure you pay all your bills on time. Even though this won’t boost your credit rating instantly, it will ensure that your rating doesn’t go down any further. You might choose to set up automatic bill payments with your bank to ensure 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 thought to be 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, presenting you with more options. If you’re in a position where you can get a weekend job, you should seriously consider it. Or take a look at your hobbies and try to create a way to increase your earnings by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a great idea.
While declaring bankruptcy is never an easy decision, it is the first step in addressing your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s critical that you evaluate the reasons that created your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating progressively, and following a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Maitland today on 1300 795 575 or visit www.bankruptcyexpertsmaitland.com.au