There’s no doubt that are some serious financial repercussions in filing for bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this predicament, don’t be alarmed. The challenging economic times observed today means that an increasing number of individuals are filing for bankruptcy. In reality, there are approximately 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to 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 alterations have 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 filing for bankruptcy.
It’s usual for individuals who declare bankruptcy to feel emotions of failure, self-loathing and remorse. Although it may seem natural have these feelings, being bankrupt is the result of simply another mistake that all of us make as humans. You should 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 much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Dealing with your financial issues is the first step in overcoming them, so you’re certainly in a better position than you were before declaring bankruptcy.
It’s imperative that you look at the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Even though there’s possibly a variety of reasons why you declared bankruptcy, all of them probably pertain 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 declaring bankruptcy and commit yourself to not making these mistakes again.
Create a budget
Once you’ve recouped emotionally from bankruptcy, the next step is to create a rational and attainable budget. You’ll have to assess your earnings and expenses thoroughly, 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 stable is your key priority. There are some simple ways to save money, for example eating at home as an alternative to dining in restaurants 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 1st step in repairing your bad credit rating is to ensure you pay all your bills on time. Even though this won’t boost your credit rating straight away, it will ensure that your credit rating doesn’t go down any further. You might want to set up automatic bill payments through your bank to ensure 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 stable employment, now is the time to do so. Consistent income over time will not only increase your credit rating but it will enable you to increase your liquid assets, providing you with more opportunities. If you’re in a situation where you can acquire a weekend job, you should sincerely consider it. Or have a look at your interests and aim to develop a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a fantastic idea.
Although filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s critical that you evaluate the reasons that led to 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, get in touch with Bankruptcy Experts Dandenong today on 1300 795 575 or visit www.bankruptcyexpertsdandenong.com.au