What Happens After You File For Bankruptcy
Bankruptcy is not a decision that should be taken lightly. There are some major financial consequences involved and your financial freedom will be restricted for several years to come. This doesn’t suggest that declaring bankruptcy is the end of the world though. It should really be considered as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy every year and most of them have the ability to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will evidently give you insight into making better financial decisions in the future.
Basically, once you have filed for bankruptcy, you surrender control of your finances and assets to a Trustee for protection against litigation that may be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases three years) after which time you’ll become discharged, which means that the financial stipulations you sustained during bankruptcy are removed. 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 declare bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the limitations of declaring bankruptcy is that you cannot exit the country while you’re undischarged only if you seek permission from your Trustee. To do this, you’ll have to supply a lot of information relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior approval from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to a minimum of five years instead of three.
You Will Be Offered Credit Right Away
One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a vast range of financial institutions. The explanation behind this is that you won’t be able to declare bankruptcy again for a lengthy period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. In certain situations, securing a loan and making timely repayments will help strengthen your credit score, which will aid you in the recovery process. But be mindful, you don’t want to take every offer thrown in your direction as some creditors are very dubious and include hidden fees and charges that can put you in debt again immediately. The key is to rebuild your credit score gradually.
Buying A Home Is Definitely Possible
There’s a common misconception that once you file for bankruptcy, you will no longer have the opportunity to attain credit for a mortgage. This is certainly not the case. Even though bankruptcy will leave you with a bad credit history, you can still purchase a home if you have the capacity to rebuild your credit within a few years, you pay all your bills on time, and you display a responsible use of credit. Naturally, you won’t have the ability to get a mortgage straight after you’re discharged, so it’s imperative to build your credit rating wisely before even contemplating securing a mortgage.
Check Your Credit On A Regular Basis
Most financial experts advise that discharged bankrupts should review their credit report about twice a year. After initially filing for bankruptcy though, it’s crucial that you take a look at your credit report each month for at least the first six months into your bankruptcy. Certain creditors may still be requesting payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to avoid any further complications, it’s pressing that you monitor your credit report to ensure it’s correct and up to date.
While bankruptcy isn’t the preferred position to be in, it doesn’t mean that your financial future is permanently restrained. There are some severe financial restrictions imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re perfectly capable of securing a bright financial future. Securing a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and implemented. For this reason, it’s vital 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 should be considered to ensure a smooth recovery process. If you’re thinking about filing for bankruptcy, reach out to Bankruptcy Experts Bunbury on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsbunbury.com.au