There’s no doubt that are some substantial financial consequences in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this scenario, don’t be alarmed. The difficult economic times observed today means that a growing number of people are declaring bankruptcy. In reality, there are approximately 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s essential 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 modifications need to be made to secure a bright future for you and your family. So here are a few simple strategies that you can use to best recover after declaring bankruptcy.
It’s common for individuals who declare bankruptcy to experience emotions of failure, self-loathing and remorse. Although it may seem natural have these feelings, becoming bankrupt is the result of just another mistake that all of us make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the very first 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 already in a better position than you were prior to filing for bankruptcy.
It’s vital that you examine 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. While there’s possibly a number of reasons why you declared bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a good idea to produce a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these mistakes again.
Make a budget
Once you’ve recuperated emotionally from bankruptcy, the next step is to develop a rational and achievable budget. You’ll want to look at your earnings and expenses carefully, and figure out 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 responsible is your foremost priority. There are some easy ways to save money, for instance eating at home as opposed to eating out and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The first step in repairing your bad credit rating is to ensure you pay all your bills on time. Although this won’t increase your credit rating instantly, it will ensure that your credit rating doesn’t go down any further. You might want to set up automatic bill payments with your bank to guarantee 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 thought to be the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t currently got consistent employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will enable you to increase your liquid assets, presenting you with more options. If you’re in a position where you can obtain a weekend job, you should honestly consider it. Or have a look at your hobbies and aim to develop a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a wonderful idea.
While filing for bankruptcy is never an easy decision, it is the first step in confronting your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s important that you reflect on the reasons that led to your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating eventually, and following a budget is paramount. If you’re considering declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Lismore today on 1300 795 575 or visit www.bankruptcyexpertslismore.com.au