Bankruptcy is not a decision that should be taken lightly. There are some serious financial consequences involved and your financial freedom will be restrained for several years to come. This doesn’t mean that declaring bankruptcy is the end of the world though. It should really be considered as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy every year and the majority of them have the ability to buy homes, cars and acquire credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will undoubtedly give you insight into making better financial decisions in the future.
Essentially, once you have filed for bankruptcy, you relinquish control of your finances and assets to a Trustee for protection against legal proceeding that might be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which implies that the financial stipulations you sustained during bankruptcy are lifted. 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 leave the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to provide a lot of details relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel internationally without prior approval from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to at least five years as opposed to three.
You Will Be Offered Credit Right Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large range of loan providers. The reason behind this is that you won’t have the capacity 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. Occasionally, obtaining a loan and making timely repayments will help strengthen your credit rating, which will help you in the recovery process. But be careful, you don’t want to take every offer thrown in your direction as some financial institutions are very dubious and include hidden fees and charges that can put you in debt again immediately. The key is to rebuild your credit score steadily.
Buying A Home Is Definitely Possible
There’s a standard misconception that once you file for bankruptcy, you will no longer have the ability to attain credit for a mortgage. This is certainly not the case. Though bankruptcy will leave you with a bad credit rating, you can still buy a home if you have the capacity to rebuild your credit within a couple of years, you pay all your bills on time, and you demonstrate a responsible use of credit. Of course, you won’t be able to acquire a mortgage straight after you’re discharged, so it’s key to build your credit record sensibly before even considering securing a mortgage.
Check Your Credit Frequently
Most financial experts advise that discharged bankrupts should examine their credit report at the very least twice a year. After initially declaring bankruptcy though, it’s vital that you check your credit report every month for at least the first six months into your bankruptcy. A number of creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to minimise any further complications, it’s crucial that you keep an eye on your credit report to ensure it’s accurate and up to date.
Although bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restrictions imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Attaining 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. Therefore, it’s crucial 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 should be taken into account to ensure a smooth recovery process. If you’re considering filing for bankruptcy, contact Bankruptcy Experts Gold Coast on 1300 879 867 or visit their website for more details: www.bankruptcyexpertsgoldcoast.com.au