Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial repercussions involved and your financial freedom will be restrained for many years to come. This doesn’t suggest that filing for 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 declare bankruptcy each year and the majority 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 filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
Essentially, once you have declared bankruptcy, you give up 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 specific period of time (in most cases 3 years) after which time you’ll become discharged, which signifies that the financial restrictions you sustained during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aspires to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the drawbacks of declaring bankruptcy is that you can’t leave the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll have 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 overseas without prior approval from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to at least five years as opposed to three.
You Will Be Offered Credit Straight Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large variety of financial institutions. The explanation behind this is that you won’t have the capacity to declare bankruptcy again for an extensive period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. In some cases, securing a loan and making timely repayments will help strengthen your credit score, which will help you in the recovery process. But be careful, you don’t want to take every offer thrown in your direction as some financial institutions are very dubious and include hidden fees and charges that can put you in debt again straight away. The trick is to rebuild your credit history slowly.
Buying A Home Is Certainly Possible
There’s a frequent misconception that whenever you file for bankruptcy, you will no longer have the chance to secure credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a poor credit score, you can still purchase a home if you’re able to rebuild your credit within a couple of years, you pay all your bills on time, and you demonstrate a responsible use of credit. Needless to say, you won’t have the capacity to get a mortgage straight after you’re discharged, so it’s imperative to build your credit history carefully before even thinking of securing a home loan.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should review their credit report at least twice a year. After initially filing for bankruptcy though, it’s essential that you look at your credit report monthly for at least the first 6 months into your bankruptcy. Several 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 minimise any further difficulties, it’s pressing that you monitor your credit report to make sure that it’s accurate and up to date.
Even though bankruptcy isn’t the ideal position to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restrictions imposed on individuals that file for 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. Consequently, it’s vital that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to should be considered to ensure a smooth recovery process. If you’re considering filing for bankruptcy, talk with Bankruptcy Experts Lismore on 1300 795 575 or visit their website for more details: www.bankruptcyexpertslismore.com.au