The best ways to Recover After Declaring Bankruptcy
There’s no doubt that are some serious financial repercussions in declaring bankruptcy, and there’s no question that your life will encounter some significant changes. If you’re in this position, don’t be alarmed. The challenging economic times observed today means that a growing number of people are filing for bankruptcy. In fact, there are around 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s important 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 alterations 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 filing for bankruptcy.
It’s usual for those who declare bankruptcy to experience emotions of failure, self-loathing and guilt. Although it may seem natural have these emotions, becoming bankrupt is the result of merely 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 problems is the first step in overcoming them, so you’re already in a better position than you were prior to declaring bankruptcy.
It’s necessary that you explore the reasons why you became bankrupt to ensure you don’t make the same mistakes again. Declaring bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Although there’s probably a range of reasons why you declared bankruptcy, all of them probably pertain to poor spending and borrowing habits. So it’s a good 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.
Create a budget
After you’ve recovered emotionally from bankruptcy, the next step is to put together a practical and achievable budget. You’ll have to look at your earnings and expenses carefully, and work out 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 foremost priority. There are some practical ways to save money, such as eating at home as an alternative to 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 mending your bad credit rating is to ensure that you pay all your bills on time. Even though this won’t improve your credit rating instantly, it will ensure that your rating doesn’t go down 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 currently got steady employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will permit you to increase your liquid assets, presenting you with more opportunities. If you’re in a position where you can acquire a weekend job, you should honestly consider it. Or take a look at your interests and try to discover 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.
Though declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s essential that you evaluate the reasons that created your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating gradually, and following a budget is very important. If you’re thinking about filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Bunbury today on 1300 795 575 or visit www.bankruptcyexpertsbunbury.com.au