There’s no doubt that bankruptcy isn’t the ideal situation to be facing. There are some severe financial repercussions involved and it’s a very complicated and stressful process that will affect you financially for years to come. Ending up in mountains of debt can happen faster than you think, and lots of individuals find themselves in this situation because of a wide variety of factors. Not having the ability to work resulting from illness is one of the most frequent reasons why individuals declare bankruptcy. It’s not as if they had any control over the situation, but being unable to settle their debts considering that they have no income is the hard reality they will have to face. In fact, 7,900 individuals in Australia filed for bankruptcy in the March 2017 quarter1, so it’s not as uncommon as some people may think. If you ask me, I think that bankruptcy is neither good nor bad. Yes, those who file for bankruptcy have made some bad financial decisions and will punished as necessary, however declaring bankruptcy is also the first step to financial freedom. A great deal of people struggle for years just to make ends meet, while their debts keep multiplying, so in most cases, bankruptcy is a chance for a fresh start for those individuals that are unable to repay their debts.
Though I’ve never been bankrupt myself, I’ve witnessed the journey of many individuals who have and surprisingly, lots of people are better off and glad they went through the process. If you’re enduring financial hardship and thinking about bankruptcy, this blog will explain what life is like after you declare bankruptcy.
You Will Not Be Debt Free By Filing For Bankruptcy
Bankruptcy is quite complicated, and there is a standard misconception that all debts are eliminated by declaring bankruptcy. This is definitely not the case. There are several debts that won’t be removed, including Centrelink debts, HECS debts, child support, court imposed fines (like speeding tickets), as well as money that is owed to an insurance provider resulting from a car accident where you were uninsured and in the wrong. Conversely, declaring bankruptcy will eliminate debts such as credit cards, GST and tax, and unsecured personal loans. The truth is, you will still have debts to pay after you file for bankruptcy, but the most serious debts in most cases, such as credit cards, will be cleared.
Feelings Of Remorse And Embarrassment Are Ordinary
Bankruptcy is a demanding process and lots of folks who file for bankruptcy have feelings of remorse and shame; as if they’ve lost in life. This is natural, however it’s critical to overcome these emotions because the truth is, humans make mistakes, and bankruptcy is a way that you can start a new beginning financially and get your life back on track. The sooner you recover from these feelings of self-loathing, the sooner you’ll be able to start the recovery process and develop a plan of how you’re going to repay your outstanding debts and rebuild your credit report. Bear in mind, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit rating, so it’s certainly not the end of the world.
You Can’t Borrow Any Money For Three Years
Unfortunately, by filing for bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s important that you start rebuilding your credit report by maintaining a stable income and paying your bills and outstanding debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the option to attain loans for secured assets like houses and cars, but your interest rates will be much higher because of your bad credit history. Though it’s not always advisable to secure loans straight away, it is possible. After seven years from the time you became bankrupt, your credit report will be clean, and you will have the option to receive all sorts of loans again at competitive rates.
Life after filing for bankruptcy surely isn’t easy, but the emotional relief that many people experience after beginning the process definitely softens the blow. There are some major financial consequences involved, but declaring bankruptcy is the first step towards financial freedom and securing a bright future for you and your family. If you’re experiencing financial hardship, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep struggling financially for years because you’re afraid of the stigma linked with bankruptcy. It’s challenging, but it’s also not the end of the world. If you ‘d like to speak to someone about your financial position, get in touch with Bankruptcy Experts Port Stephens on 1300 795 575 for a confidential discussion, or alternatively visit their website for more details: http://www.bankruptcyexpertsportstephens.com.au