There’s no doubt that are some serious financial consequences in declaring bankruptcy, and there’s no question that your life will encounter some significant changes. If you’re in this predicament, don’t be alarmed. The tough economic times experienced today means that more and more people are filing for bankruptcy. Actually, there are about 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s crucial that you look towards the future and aim to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some adjustments will 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 filing for bankruptcy.
It’s normal for people who file for bankruptcy to feel emotions of failure, self-loathing and regret. Although it may seem natural have these thoughts, being bankrupt is the result of merely another mistake that we all make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you succumb 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 actually in a better position than you were before filing for bankruptcy.
It’s important that you examine the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. Whilst there’s possibly a number of reasons why you filed for 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 filing for bankruptcy and devote yourself to not making these mistakes again.
Make a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to create a rational and conceivable budget. You’ll want to look at your earnings and expenses thoroughly, and formulate a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or bypass some luxury items, becoming financially healthy is your key priority. There are some practical ways to save money, for example eating at home rather than eating in restaurants and revoking your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unexpected expenses.
Pay your bills on time
The initial step in repairing your bad credit rating is to ensure that you pay all your bills on time. Although this won’t increase your credit rating immediately, 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 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 as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t already got consistent employment, now is the time to do so. Regular income over time will not only strengthen your credit rating but it will allow you to increase your liquid assets, providing you with more options. If you’re in a situation where you can acquire a weekend job, you should seriously consider it. Or have a look at your hobbies and attempt to develop a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a great idea.
Though 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 resulted in your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating progressively, and following a budget is extremely important. If you’re considering declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Shellharbour today on 1300 795 575 or visit www.bankruptcyexpertsshellharbour.com.au