There’s no doubt that are some serious financial repercussions in declaring bankruptcy, and there’s no question that your life will encounter some substantial changes. If you’re in this position, don’t be alarmed. The tough economic times experienced today means that an increasing number of people are filing for bankruptcy. Actually, there are as much as 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s critical 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 adjustments need to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for individuals who file for bankruptcy to feel emotions of failure, self-loathing and remorse. Although it may seem natural have these emotions, becoming bankrupt is the result of merely another mistake that all of us make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the initial 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. Confronting your financial troubles is the first step in overcoming them, so you’re actually in a better position than you were prior to declaring bankruptcy.
It’s necessary that you look at the reasons why you became bankrupt to make sure 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. Though there’s probably a variety of reasons why you filed for bankruptcy, all of them probably relate to poor 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 commit yourself to not making these oversights again.
Create a budget
Once you’ve recouped emotionally from bankruptcy, the next step is to put together a rational and achievable budget. You’ll have to consider your income and expenses closely, and develop a way to save money while still paying all your living expenses. Even if it means that you downsize your house or bypass some luxury items, becoming financially stable is your main priority. There are some easy ways to save money, for example eating at home as an alternative to 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 initial step in mending your bad credit rating is to ensure that you pay all your bills on time. Even though this won’t increase your credit rating immediately, it will ensure that your rating doesn’t go down any further. You might wish to create 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 thought to be the single, most powerful 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. Regular income over time will not only enhance your credit rating but it will permit you to increase your liquid assets, providing you with more opportunities. If you’re in a position where you can obtain a weekend job, you should genuinely consider it. Or take a look at your hobbies and try to come up with a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is a fantastic idea.
Whilst declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that caused your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating gradually, and sticking to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Frankston today on 1300 795 575 or visit www.bankruptcyexpertsfrankston.com.au