Bankruptcy is not a decision that should be taken lightly. There are some major financial implications involved and your financial freedom will be restricted for years to come. This doesn’t mean that declaring bankruptcy is the end of the world though. It should actually be thought of as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy every year and the majority of them have the capacity to buy homes, cars and acquire credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will most definitely give you insight into making better financial decisions in the future.
Fundamentally, once you have filed for bankruptcy, you surrender control of your finances and assets to a Trustee for protection against legal action that may be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which indicates that the financial restraints you suffered during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article tries to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the restraints of declaring bankruptcy is that you can’t leave the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to supply a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country 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 instead of three.
You Will Be Offered Credit Straight Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a wide range of lenders. The main reason behind this is that you won’t be able to file for bankruptcy again for an extended period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. Occasionally, obtaining a loan and making timely repayments will help strengthen your credit score, which will help you in the recovery process. But be cautious, 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 trick is to rebuild your credit record progressively.
Buying A Home Is Definitely Possible
There’s a popular misconception that when you file for bankruptcy, you will no longer have the ability to acquire credit for a home loan. This is definitely not the case. Though bankruptcy will leave you with a poor credit score, you can still buy a home if you have the ability to rebuild your credit within a few years, you pay all your bills in a timely manner, and you exhibit a responsible use of credit. Naturally, you won’t have the capacity to acquire a home loan straight after you’re discharged, so it’s vital to build your credit score sensibly before even envisioning securing a mortgage.
Check Your Credit Frequently
Most financial specialists advise that discharged bankrupts should inspect their credit report at least twice a year. After initially filing for bankruptcy though, it’s critical that you look at your credit report every month for at least the first 6 months into your bankruptcy. Various creditors may still be demanding payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to stay clear of any further complications, it’s vital that you keep an eye on your credit report to make sure it’s correct and up to date.
Even though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restrictions imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Obtaining home loans and other credit lines will be possible a few years after discharge if the recovery process is well-planned and implemented. Consequently, it’s paramount that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to have to be taken into consideration to ensure a smooth recovery process. If you’re considering declaring bankruptcy, phone Bankruptcy Experts Geraldton on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsgeraldton.com.au