How to Recover After Filing for Bankruptcy
There’s no doubt that are some substantial financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this situation, don’t be alarmed. The tough economic times witnessed today means that an increasing number of people are declaring bankruptcy. In reality, there are approximately 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s essential 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 alterations 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 usual for people who file for bankruptcy to feel emotions of failure, self-loathing and guilt. Although it may seem natural have these thoughts, being bankrupt is the result of simply 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 troubles is the first step in overcoming them, so you’re actually in a better position than you were prior to filing for bankruptcy.
It’s necessary that you review the reasons why you became bankrupt to make certain you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Although there’s probably a range of reasons why you declared bankruptcy, all of them probably relate to poor 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 commit yourself to not making these errors again.
Make a budget
Once you’ve recovered emotionally from bankruptcy, the next step is to develop a realistic and achievable budget. You’ll need to examine your earnings and expenses thoroughly, 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 do away with some luxury items, becoming financially sound is your primary priority. There are some practical ways to save money, for instance eating at home instead of eating in restaurants and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The 1st step in mending your bad credit rating is to ensure that you pay all your bills on time. Although this won’t improve your credit rating straight away, it will ensure that your credit rating doesn’t decrease any further. You might prefer to create automatic bill payments through your bank to ensure 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 regarded as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t presently got steady employment, now is the time to do so. Consistent income over time will not only increase your credit rating but it will allow you to increase your liquid assets, providing you with more choices. If you’re in a situation where you can obtain a weekend job, you should genuinely consider it. Or take a look at your interests and attempt to discover a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a wonderful idea.
Although filing for 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 necessary that you reflect on the reasons that caused your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating gradually, and following a budget is extremely important. If you’re considering filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Geelong today on 1300 795 575 or visit www.bankruptcyexpertsgeelong.com.au