There’s no doubt that are some substantial financial consequences in filing for bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this position, don’t be alarmed. The challenging economic times experienced today means that a growing number of individuals are declaring bankruptcy. In fact, there are approximately 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s critical 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 adjustments will need to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after declaring bankruptcy.
It’s typical for those who file for bankruptcy to experience feelings of failure, self-loathing and guilt. Although it may seem natural have these emotions, being bankrupt is the result of just another mistake that all of us make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the very first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Facing your financial issues is the first step in overcoming them, so you’re actually in a better position than you were prior to declaring bankruptcy.
It’s critical that you evaluate the reasons why you became bankrupt to ensure you don’t make the same mistakes again. Declaring bankruptcy gives you a second chance to get your finances in order, so it’s best you make the most of it. Even though there’s probably a variety of reasons why you filed for bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a smart idea to create a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these oversights again.
Make a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to develop a rational and manageable budget. You’ll need to assess your earnings and expenses carefully, and figure out 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 responsible is your primary priority. There are some simple ways to save money, such as eating at home as opposed to eating out and revoking your gym membership in favour of walking to work. Always remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The initial step in repairing your bad credit rating is to ensure you pay all your bills on time. Though this won’t improve your credit rating instantly, it will ensure that your credit rating doesn’t drop any further. You might wish to create automatic bill payments through 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 already got consistent employment, now is the time to do so. Consistent income over time will not only strengthen your credit rating but it will allow you to increase your liquid assets, presenting you with more possibilities. If you’re in a position where you can get a weekend job, you should honestly consider it. Or take a look at your interests and aim to come up with a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a terrific idea.
Whilst declaring bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you evaluate the reasons that triggered your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating progressively, and adhering to a budget is very important. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Gold Coast Bankruptcy Centre today on 1300 795 575 or visit www.goldcoastbankruptcycentre.com.au