There’s no doubt that are some considerable financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this situation, don’t be alarmed. The difficult economic times experienced today means that a growing number of people are filing for bankruptcy. In reality, there are roughly 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s vital that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some adjustments need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after declaring bankruptcy.
It’s normal for individuals who file for bankruptcy to feel feelings of failure, self-loathing and remorse. Though it may seem natural have these emotions, becoming bankrupt is the result of just another mistake that all of us make as humans. You need 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 surrender to these negative feelings, the longer it will take to recover. Dealing with your financial difficulties is the first step in overcoming them, so you’re already in a better position than you were before filing for bankruptcy.
It’s vital that you look at the reasons why you became bankrupt to ensure 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. 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 create a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these errors again.
Make a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to put together a realistic and attainable budget. You’ll need to look at your earnings and expenses thoroughly, and work out a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forfeit some luxury items, becoming financially healthy is your main priority. There are some practical ways to save money, for instance eating at home as opposed to eating in restaurants and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to ensure that you pay all your bills on time. Though this won’t increase your credit rating straight away, it will ensure that your rating doesn’t go down any further. You might prefer to set up automatic bill payments through your bank to guarantee that you don’t miss 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 considered the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t already got steady employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will permit you to increase your liquid assets, providing you with more possibilities. If you’re in a position where you can get a weekend job, you should genuinely consider it. Or have a look at your interests and attempt 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.
While declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s important that you reflect on the reasons that caused your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating progressively, and following a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Emerald today on 1300 795 575 or visit www.bankruptcyexpertsemerald.com.au