Bankruptcy is not a decision that should be taken lightly. There are some major financial repercussions involved and your financial freedom will be limited for several years to come. This doesn’t mean that filing for bankruptcy is the end of the world though. It should actually be thought of as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy every year and many of them have the ability to buy homes, cars and attain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will undoubtedly give you insight into making better financial decisions in the future.
Fundamentally, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against legal proceeding that may be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which implies that the financial stipulations you incurred during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article intends 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 restraints of declaring bankruptcy is that you cannot exit the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll need to provide a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior approval from your bankruptcy Trustee, and in many cases will increase the length of your undischarged bankruptcy to at least five years instead of three.
You Will Be Offered Credit Right Away
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a wide variety of loan providers. The main reason behind this is that you won’t have the capacity to file for bankruptcy again for a long period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Sometimes, securing a loan and making timely repayments will help strengthen your credit score, which will help you in the recovery process. But beware, you don’t want to take every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again immediately. The trick is to rebuild your credit rating progressively.
Buying A Home Is Certainly Possible
There’s a frequent misconception that after you declare bankruptcy, you will no longer have the opportunity to acquire credit for a home loan. This is certainly not the case. Whilst bankruptcy will leave you with a poor credit history, you can still buy a home if you manage to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you exhibit a responsible use of credit. Obviously, you won’t have the ability to obtain a mortgage straight after you’re discharged, so it’s very important to build your credit rating intelligently before even thinking about securing a home loan.
Check Your Credit On A Regular Basis
Most financial experts recommend that discharged bankrupts should inspect their credit report about twice a year. After initially declaring bankruptcy though, it’s crucial that you check your credit report every month for at least the first 6 months into your bankruptcy. Various 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 prevent any further difficulties, it’s important that you monitor your credit report to ensure it’s correct 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 limited. There are some severe financial constraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Obtaining home loans and other lines of credit will be possible a few years after discharge if the recovery process is well-planned and implemented. For this reason, it’s essential that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to should be taken into consideration to ensure a smooth recovery process. If you’re considering filing for bankruptcy, phone Bankruptcy Experts Dandenong on 1300 795 575 or visit their website for more details: www.bankruptcyexpertsdandenong.com.au