The best ways to Recover After Declaring Bankruptcy
There’s no doubt that are some considerable financial repercussions in filing for bankruptcy, and there’s no question that your life will encounter some substantial changes. If you’re in this position, don’t be alarmed. The difficult economic times observed today means that more and more people are filing for bankruptcy. In reality, there are around 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
Rather than 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 changes have to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after declaring bankruptcy.
It’s typical for individuals who file for bankruptcy to experience feelings of failure, self-loathing and remorse. Although it may seem natural have these thoughts, becoming bankrupt is the result of simply another mistake that all of us 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 much easier than you think. The longer you give in 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 certainly in a better position than you were prior to declaring bankruptcy.
It’s crucial that you evaluate 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 shape, so it’s best you make the most of it. Whilst there’s probably a variety of reasons why you declared bankruptcy, most of them probably relate to bad spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these oversights again.
Create a budget
After you’ve recovered emotionally from bankruptcy, the next step is to create a practical and attainable budget. You’ll have to inspect your earnings and expenses closely, and formulate a way to save money while still paying all your living expenses. Even if it means that you downsize your house or do away with some luxury items, becoming financially responsible is your main priority. There are some practical ways to save money, for instance eating at home as an alternative to dining in restaurants and cancelling 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. Though this won’t boost your credit rating instantly, it will ensure that your credit rating doesn’t go down any further. You might prefer to create automatic bill payments with 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 considered the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t currently got stable employment, now is the time to do so. Consistent income over time will not only strengthen your credit rating but it will permit you to increase your liquid assets, providing you with more options. If you’re in a situation where you can get a weekend job, you should seriously consider it. Or take a look at your hobbies 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 income is an excellent idea.
Whilst declaring bankruptcy is never an easy decision, it is the first step in addressing your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you assess the reasons that brought about your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating progressively, and following a budget is extremely important. If you’re considering declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Tamworth today on 1300 795 575 or visit www.bankruptcyexpertstamworth.com.au