There’s no doubt that are some tough financial consequences in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this scenario, don’t be alarmed. The difficult economic times experienced today means that more and more individuals are filing for bankruptcy. As a matter of fact, there are approximately 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s imperative 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 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 typical for people who declare bankruptcy to feel emotions of failure, self-loathing and guilt. While it may seem natural have these feelings, becoming bankrupt is the result of merely another mistake that we all make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Addressing your financial difficulties is the first step in overcoming them, so you’re certainly in a better position than you were prior to declaring bankruptcy.
It’s important that you explore the reasons why you became bankrupt to make sure 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. Though there’s probably a variety of reasons why you declared bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a smart idea to produce a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these oversights again.
Create a budget
After you’ve bounced back emotionally from bankruptcy, the next step is to develop a practical and conceivable budget. You’ll want to inspect your earnings and expenses carefully, and develop a way to save money while still paying all your living expenses. Even if it means that you downsize your house or relinquish some luxury items, becoming financially responsible is your primary priority. There are some simple ways to save money, like eating at home instead of eating in restaurants and cancelling 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 very first step in restoring your bad credit rating is to make sure you pay all your bills on time. Although this won’t improve your credit rating straight away, it will ensure that your rating doesn’t decrease any further. You might want to set up automatic bill payments with 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 currently got consistent employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will permit you to increase your liquid assets, presenting you with more possibilities. If you’re in a situation where you can get a weekend job, you should honestly consider it. Or take a look at your hobbies and try to come up with a way to increase your earnings by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a great idea.
While declaring 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 necessary 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 improve your credit rating gradually, and sticking to a budget is extremely important. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Geraldton today on 1300 795 575 or visit www.bankruptcyexpertsgeraldton.com.au