Bankruptcy is not a decision that should be taken lightly. There are some serious financial repercussions involved and your financial freedom will be constrained for several years to come. This doesn’t mean that declaring bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy every year and many of them are able to buy homes, cars and attain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will definitely give you insight into making better financial decisions in the future.
Generally speaking, once you have filed for bankruptcy, you hand over control of your finances and assets to a Trustee in exchange for protection against legal proceeding that may be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which signifies that the financial restrictions you suffered during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the disadvantages of declaring bankruptcy is that you can’t exit the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll need to supply a lot of information relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior approval from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to at least five years as opposed to three.
You Will Be Offered Credit Straight Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large range of financial institutions. The reason behind this is that you won’t be able to declare bankruptcy again for a lengthy period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Sometimes, securing a loan and making timely repayments will help improve your credit rating, which will aid you in the recovery process. But be cautious, you don’t want to accept every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again instantly. The trick is to rebuild your credit record progressively.
Buying A Home Is Certainly Possible
There’s a frequent misconception that after you file for bankruptcy, you will no longer have the ability to acquire credit for a mortgage. This is certainly not the case. Whilst bankruptcy will leave you with a bad credit rating, you can still purchase a home if you’re able to rebuild your credit within a few years, you pay all your bills in a timely manner, and you display a responsible use of credit. Naturally, you won’t have the capacity to get a mortgage straight after you’re discharged, so it’s important to build your credit score intelligently before even envisioning securing a mortgage.
Check Your Credit Regularly
Most financial experts recommend that discharged bankrupts should take a look at their credit report around twice a year. After initially declaring bankruptcy though, it’s critical that you inspect your credit report every month for at least the first 6 months into your bankruptcy. A number of creditors may still be demanding 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 essential that you keep track of your credit report to make sure it’s accurate and up to date.
Even though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial constraints imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Obtaining a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Consequently, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to have to be considered to ensure a smooth recovery process. If you’re thinking about declaring bankruptcy, speak to Bankruptcy Experts Frankston on 1300 795 575 or visit their website for more details: www.bankruptcyexpertsfrankston.com.au