There’s no doubt that are some significant financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some significant changes. If you’re in this predicament, don’t be alarmed. The tough economic times witnessed today means that a growing number of individuals are filing for bankruptcy. In reality, there are as much as 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s vital 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 will need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after declaring bankruptcy.
It’s typical for individuals who declare bankruptcy to experience emotions of failure, self-loathing and regret. Though it may seem natural have these thoughts, being bankrupt is the result of just 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 less complicated than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Dealing with your financial issues is the first step in overcoming them, so you’re already in a better position than you were before declaring bankruptcy.
It’s important that you review the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Even though there’s probably a range of reasons why you filed for bankruptcy, all 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 errors again.
Create a budget
Once you’ve bounced back emotionally from bankruptcy, the next step is to create a realistic and conceivable budget. You’ll need to evaluate your earnings and expenses carefully, and formulate a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forfeit some luxury items, becoming financially healthy is your leading priority. There are some simple ways to save money, such as eating at home instead of dining in restaurants and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to ensure you pay all your bills on time. Although this won’t increase your credit rating immediately, it will ensure that your rating doesn’t decrease any further. You might want to create automatic bill payments through 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 considered 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 improve your credit rating but it will enable you to increase your liquid assets, providing you with more possibilities. If you’re in a position where you can acquire a weekend job, you should sincerely consider it. Or take a look at your interests and aim to create a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a wonderful idea.
While declaring bankruptcy is never an easy decision, it is the first step in addressing your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that created your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating eventually, and following a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Darwin today on 1300 795 575 or visit www.bankruptcyexpertsdarwin.com.au