Bankruptcy is not a decision that should be taken lightly. There are some serious financial implications involved and your financial freedom will be restricted for years to come. This doesn’t imply 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 a lot of them are able to buy homes, cars and obtain credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
Ultimately, once you have filed for bankruptcy, you give up control of your finances and assets to a Trustee for protection against legal action that could be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which implies that the financial restraints you sustained 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 restrictions of declaring bankruptcy is that you cannot exit the country while you’re undischarged only if you seek permission from your Trustee. To do this, you’ll need to supply 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 overseas without prior consent from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Immediately
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a vast range of loan providers. The main reason behind this is that you won’t have the capacity to file for bankruptcy again for an extended 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 history, which will aid you in the recovery process. But be warned, you don’t want to take every offer thrown in your direction as some lending 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 gradually.
Buying A Home Is Definitely Possible
There’s a popular misconception that whenever you file for bankruptcy, you will no longer have the capacity to attain credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a bad credit history, you can still purchase a home if you have the ability to rebuild your credit within a couple of years, you pay all your bills on time, and you exhibit a responsible use of credit. Naturally, you won’t be able to acquire a mortgage straight after you’re discharged, so it’s vital to build your credit score intelligently before even considering securing a home loan.
Check Your Credit Frequently
Most financial specialists recommend that discharged bankrupts should check their credit report at least twice a year. After initially declaring bankruptcy though, it’s critical that you look at your credit report each month for at least the first six months into your bankruptcy. Some creditors may still be requesting 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 difficulties, it’s crucial that you keep an eye on your credit report to ensure it’s accurate and up to date.
Though bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently limited. There are some serious financial limitations imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re perfectly capable of securing a bright financial future. Acquiring 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. Hence, it’s essential that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to should be taken into account to ensure a smooth recovery process. If you’re contemplating filing for bankruptcy, speak with Bankruptcy Experts Whitsundays on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertswhitsundays.com.au