There’s no doubt that are some heavy financial repercussions in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this predicament, don’t be alarmed. The tough economic times witnessed today means that more and more individuals are filing for bankruptcy. In reality, there are close to 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s important that you look towards the future and attempt 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 couple of simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for people who file for bankruptcy to feel feelings of failure, self-loathing and remorse. While it may seem natural have these feelings, being bankrupt is the result of just another mistake that all of us make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the initial step towards financial freedom, and recovering from a bad credit rating is easier than you think. The longer you give in 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 already in a better position than you were before declaring bankruptcy.
It’s important that you evaluate the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. Whilst there’s possibly a number of reasons why you declared bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a smart idea to make a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these mistakes again.
Make a budget
Once you’ve recuperated emotionally from bankruptcy, the next step is to make a rational and conceivable budget. You’ll have to consider your income and expenses thoroughly, 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 sacrifice some luxury items, becoming financially healthy is your primary priority. There are some easy ways to save money, for example eating at home as an alternative to eating in restaurants and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The 1st step in mending your bad credit rating is to make sure you pay all your bills on time. Even though this won’t increase your credit rating immediately, it will ensure that your credit rating doesn’t go down any further. You might choose to set up automatic bill payments with your bank to guarantee 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 considered as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t presently got consistent employment, now is the time to do so. Regular income over time will not only strengthen your credit rating but it will enable you to increase your liquid assets, providing you with more choices. If you’re in a position where you can obtain a weekend job, you should sincerely consider it. Or take a look at your hobbies and attempt 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 earnings is a wonderful idea.
While declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s important that you assess the reasons that caused your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating progressively, and adhering to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Australia today on 1300 795 575 or visit www.bankruptcy-australia.net.au