There’s no doubt that are some tough financial repercussions in declaring bankruptcy, and there’s no question that your life will encounter some significant changes. If you’re in this predicament, don’t be alarmed. The challenging economic times witnessed today means that a growing number of people are filing for bankruptcy. As a matter of fact, there are around 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s vital 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 need 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 declaring bankruptcy.
It’s usual for individuals who file for bankruptcy to experience feelings of failure, self-loathing and remorse. Even though it may seem natural have these feelings, being bankrupt is the result of merely 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 easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Confronting your financial issues 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 imperative that you look at the reasons why you became bankrupt to make certain you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. While there’s possibly a number of reasons why you declared bankruptcy, all of them probably pertain to bad spending and borrowing habits. So it’s a good 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
After you’ve recuperated emotionally from bankruptcy, the next step is to develop a rational and attainable budget. You’ll have to inspect your income and expenses thoroughly, and figure out 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 sound is your primary priority. There are some simple ways to save money, for example eating at home instead of eating out and revoking your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The initial step in repairing your bad credit rating is to make sure that you pay all your bills on time. Although this won’t increase your credit rating instantly, it will ensure that your rating doesn’t go down any further. You might wish to set up automatic bill payments through your bank to ensure 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 regarded 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 increase your credit rating but it will allow you to increase your liquid assets, providing you with more possibilities. If you’re in a position where you can obtain a weekend job, you should sincerely consider it. Or take a look at your interests and try to develop a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a wonderful idea.
Though declaring bankruptcy is never an easy decision, it is the first step in addressing your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s critical that you reflect on the reasons that resulted in your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating eventually, and sticking to a budget is extremely important. If you’re thinking about filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Tennant Creek today on 1300 795 575 or visit www.bankruptcyexpertstennantcreek.com.au