There’s no doubt that are some considerable financial repercussions in filing for bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this position, don’t be alarmed. The difficult economic times observed today means that more and more individuals are declaring bankruptcy. As a matter of fact, there are around 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s important 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 few simple strategies that you can use to best recover after declaring bankruptcy.
It’s common for those who file for bankruptcy to feel feelings of failure, self-loathing and regret. Though it may seem natural have these thoughts, being bankrupt is the result of just another mistake that we all 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 surrender to these negative feelings, the longer it will take to recover. Dealing with your financial problems is the first step in overcoming them, so you’re certainly in a better position than you were prior to filing for bankruptcy.
It’s vital that you review the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Though there’s possibly a range of reasons why you declared bankruptcy, all 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 devote yourself to not making these oversights again.
Make a budget
After you’ve bounced back emotionally from bankruptcy, the next step is to create a realistic and attainable budget. You’ll need to consider your income and expenses carefully, 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 forego some luxury items, becoming financially stable is your key priority. There are some practical ways to save money, such as eating at home rather than eating out and revoking your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The initial step in restoring your bad credit rating is to make sure you pay all your bills on time. Whilst this won’t improve your credit rating immediately, it will ensure that your credit rating doesn’t go down any further. You might want to create automatic bill payments through your bank to ensure 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 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 strengthen your credit rating but it will permit you to increase your liquid assets, providing you with more opportunities. If you’re in a position where you can acquire a weekend job, you should honestly consider it. Or take a look at your hobbies and aim to come up with a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is an excellent idea.
Though declaring bankruptcy is never an easy decision, it is the very first step in confronting your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s essential that you assess 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 gradually, and following a budget is very important. If you’re considering declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Port Stephens today on 1300 795 575 or visit www.bankruptcyexpertsportstephens.com.au