What Happens After You File For Bankruptcy
Bankruptcy is not a decision that should be taken lightly. There are some severe financial consequences involved and your financial freedom will be confined for years to come. This doesn’t imply that declaring bankruptcy is the end of the world though. It should really be thought of as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy each year and a lot 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 certainly give you insight into making better financial decisions in the future.
In essence, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against potential lawsuits that may be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which signifies that the financial constraints you suffered 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 unless you request permission from your Trustee. To do this, you’ll need to supply a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior consent from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years instead of three.
You Will Be Offered Credit Immediately
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a variety of financial institutions. The explanation behind this is that you won’t have the ability to declare bankruptcy again for an extended period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In certain situations, acquiring a loan and making timely repayments will help strengthen your credit score, which will help you in the recovery process. But be cautious, you don’t want to accept every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again instantly. The trick is to rebuild your credit score steadily.
Buying A Home Is Definitely Possible
There’s a common misconception that after you declare bankruptcy, you will no longer have the ability to attain credit for a home loan. This is definitely not the case. Although bankruptcy will leave you with a bad credit record, you can still purchase a home if you have the ability to rebuild your credit within a few years, you pay all your bills in a timely manner, and you display a responsible use of credit. Obviously, you won’t have the capacity to get a home loan straight after you’re discharged, so it’s critical to build your credit record sensibly before even envisioning securing a mortgage.
Check Your Credit On A Regular Basis
Most financial experts recommend that discharged bankrupts should take a look at their credit report at the very least twice a year. After initially filing for bankruptcy though, it’s crucial that you inspect your credit report monthly for at least the first 6 months into your bankruptcy. Certain creditors may still be demanding payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to prevent any further difficulties, it’s essential that you monitor your credit report to ensure it’s correct and up to date.
Whilst bankruptcy isn’t the most ideal position to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial constraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Obtaining home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and executed. Therefore, it’s vital that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to must be taken into account to ensure a smooth recovery process. If you’re thinking about filing for bankruptcy, phone Bankruptcy Experts Tamworth on 1300 795 575 or visit their website for more details: www.bankruptcyexpertstamworth.com.au