There’s no doubt that are some substantial financial repercussions in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this situation, don’t be alarmed. The difficult economic times experienced today means that a growing number of people are declaring bankruptcy. In fact, there are close to 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s vital that you look towards the future and try 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 several simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for individuals who declare bankruptcy to experience emotions of failure, self-loathing and regret. Though it may seem natural have these thoughts, being bankrupt is the result of simply another mistake that we all make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Dealing with your financial problems is the first step in overcoming them, so you’re actually in a better position than you were prior to declaring bankruptcy.
It’s essential 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 shape, so it’s best you make the most of it. Even though there’s probably a variety of reasons why you filed for bankruptcy, most of them probably relate to poor spending and borrowing habits. So it’s a smart idea to produce a list of two or three things that led you to declaring 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 make a rational and attainable budget. You’ll need to look at your income and expenses closely, and formulate 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 healthy is your leading priority. There are some practical ways to save money, for instance eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The very first step in repairing your bad credit rating is to make sure you pay all your bills on time. Even though this won’t improve your credit rating immediately, it will ensure that your rating doesn’t drop any further. You might wish to create 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 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 consistent employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will enable you to increase your liquid assets, presenting you with more choices. If you’re in a position where you can obtain a weekend job, you should seriously consider it. Or have a look at your interests and try to create 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.
Though declaring bankruptcy is never an easy decision, it is the first step in confronting your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s important that you evaluate the reasons that triggered your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating gradually, and sticking to a budget is extremely important. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Gold Coast today on 1300 879 867 or visit www.bankruptcyexpertsgoldcoast.com.au