There’s no doubt that are some considerable financial consequences in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this position, don’t be alarmed. The difficult economic times observed today means that a growing number of people are declaring bankruptcy. Actually, there are approximately 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s imperative that you look towards the future and aim 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 few simple strategies that you can use to best recover after declaring bankruptcy.
It’s typical for individuals who declare bankruptcy to feel feelings of failure, self-loathing and regret. While it may seem natural have these thoughts, 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 much easier than you think. The longer you give in 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 before declaring bankruptcy.
It’s very important that you explore the reasons why you became bankrupt to ensure 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. Whilst there’s probably a range 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 produce a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these mistakes again.
Make a budget
Once you’ve recovered emotionally from bankruptcy, the next step is to develop a realistic and achievable budget. You’ll want to assess your earnings and expenses carefully, 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 foremost priority. There are some practical ways to save money, for example eating at home as opposed to dining in restaurants and revoking your gym membership in favour of walking to work. Always remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The first step in mending your bad credit rating is to ensure 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 decrease any further. You might choose to set up automatic bill payments through your bank to guarantee 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 considered the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t already got stable employment, now is the time to do so. Regular income over time will not only strengthen your credit rating but it will permit you to increase your liquid assets, providing you with more choices. If you’re in a situation where you can get a weekend job, you should seriously consider it. Or have 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 terrific idea.
Although filing for bankruptcy is never an easy decision, it is the first step in confronting 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 improve your credit rating progressively, and adhering to a budget is paramount. If you’re thinking about declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Fremantle today on 1300 795 575 or visit www.bankruptcyexpertsfremantle.com.au