Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial consequences involved and your financial freedom will be restricted for many years to come. This doesn’t indicate 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 declare bankruptcy each year and most of them are able to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
Generally speaking, once you have declared bankruptcy, you give up control of your finances and assets to a Trustee in exchange for protection against legal action 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 3 years) after which time you’ll become discharged, which implies that the financial constraints you incurred during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives 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 restraints 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 need to supply a lot of details 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 permission 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 plenty of discharged bankrupts is that they will immediately be offered credit by a large range of financial institutions. The explanation behind this is that you won’t have the ability 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 some situations, obtaining a loan and making timely repayments will help strengthen your credit history, which will assist you in the recovery process. But be careful, you don’t want to take 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 history progressively.
Buying A Home Is Certainly Possible
There’s a standard misconception that once you file for bankruptcy, you will no longer have the ability to acquire credit for a home loan. This is certainly not the case. While bankruptcy will leave you with a poor credit history, 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 be able to get a home loan straight after you’re discharged, so it’s very important to build your credit rating wisely before even envisioning securing a home loan.
Check Your Credit On A Regular Basis
Most financial specialists advise that discharged bankrupts should examine their credit report about twice a year. After initially filing for bankruptcy though, it’s vital that you inspect your credit report each month for at least the first six months into your bankruptcy. Certain creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to steer clear of any further complications, it’s critical that you keep track of your credit report to make sure that it’s accurate and up to date.
While bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently restrained. There are some severe financial constraints imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Securing a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. For this reason, it’s imperative 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 should be taken into consideration to ensure a smooth recovery process. If you’re contemplating declaring bankruptcy, get in touch with Bankruptcy Experts Mackay on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsmackay.com.au