There’s no doubt that are some significant financial consequences in declaring bankruptcy, and there’s no question that your life will go through some substantial changes. If you’re in this position, don’t be alarmed. The tough economic times experienced today means that a growing number of people are filing for bankruptcy. As a matter of fact, there are as much as 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s important 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 modifications have 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 declaring bankruptcy.
It’s normal for individuals who file for bankruptcy to experience feelings of failure, self-loathing and guilt. Even though it may seem natural have these feelings, becoming bankrupt is the result of just another mistake that all of us make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Dealing with your financial issues is the first step in overcoming them, so you’re actually in a better position than you were before filing for bankruptcy.
It’s necessary that you evaluate the reasons why you became bankrupt to ensure 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. 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 good idea to produce a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.
Make a budget
After you’ve recouped emotionally from bankruptcy, the next step is to develop a realistic and manageable budget. You’ll need to consider your income and expenses carefully, and develop a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forego some luxury items, becoming financially stable is your primary priority. There are some simple ways to save money, such as eating at home instead of eating out and revoking your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unexpected expenses.
Pay your bills on time
The 1st step in repairing your bad credit rating is to make sure that you pay all your bills on time. Although this won’t increase your credit rating immediately, it will ensure that your credit rating doesn’t decrease any further. You might choose to set up automatic bill payments with 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 effective action you can take to restore your credit rating.
Increase your income
If you haven’t presently got stable employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will allow 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 honestly consider it. Or have a look at your hobbies and aim to create a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a great idea.
While filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you assess the reasons that brought about 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 very important. If you’re considering filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Whitsundays today on 1300 795 575 or visit www.bankruptcyexpertswhitsundays.com.au