There’s no doubt that are some serious financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some significant changes. If you’re in this scenario, don’t be alarmed. The challenging economic times observed today means that a growing number of individuals are declaring bankruptcy. In fact, there are approximately 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s crucial that you look towards the future and try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some improvements will need 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 filing for bankruptcy.
It’s normal for individuals who declare bankruptcy to experience emotions of failure, self-loathing and remorse. While it may seem natural have these feelings, being bankrupt is the result of simply another mistake that all of us make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the initial step towards financial freedom, and recovering from a bad credit rating is easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Dealing with your financial troubles is the first step in overcoming them, so you’re actually in a better position than you were prior to filing for bankruptcy.
It’s critical that you take a look at the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Although there’s possibly 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 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
Once you’ve recuperated emotionally from bankruptcy, the next step is to make a realistic and conceivable budget. You’ll want to consider 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 forego some luxury items, becoming financially stable is your key priority. There are some simple ways to save money, such as eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Always remember 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 you pay all your bills on time. While this won’t increase your credit rating straight away, it will ensure that your rating doesn’t decrease any further. You might wish to set up automatic bill payments with 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 regarded as the single, most effective 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. Regular income over time will not only increase your credit rating but it will allow you to increase your liquid assets, providing you with more opportunities. If you’re in a position where you can acquire a weekend job, you should seriously consider it. Or take a look at your hobbies and try to discover a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a great idea.
Whilst filing for bankruptcy is never an easy decision, it is the very first step in confronting 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 triggered your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is very important. If you’re considering declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Mackay today on 1300 795 575 or visit www.bankruptcyexpertsmackay.com.au