There’s no doubt that are some substantial financial consequences in declaring bankruptcy, and there’s no question that your life will experience some significant changes. If you’re in this scenario, don’t be alarmed. The difficult economic times witnessed today means that a growing number of individuals are declaring bankruptcy. In reality, there are as much as 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s essential 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 alterations 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 typical for people who file for bankruptcy to experience emotions of failure, self-loathing and regret. Though it may seem natural have these feelings, becoming 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 very first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you give in to these negative feelings, the longer it will take to recover. Addressing your financial issues is the first step in overcoming them, so you’re already in a better position than you were prior to declaring bankruptcy.
It’s crucial that you review the reasons why you became bankrupt to make certain you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in order, so it’s best you make the most of it. Whilst there’s probably a number of reasons why you filed for bankruptcy, all of them probably relate 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 devote yourself to not making these oversights again.
Create a budget
After you’ve recouped emotionally from bankruptcy, the next step is to put together a rational and attainable budget. You’ll have to examine your income and expenses closely, and formulate a way to save money while still paying all your living expenses. Even if it means that you downsize your house or do away with some luxury items, becoming financially responsible is your main priority. There are some simple ways to save money, for example eating at home instead of 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 unforeseen expenses.
Pay your bills on time
The initial step in restoring your bad credit rating is to ensure you pay all your bills on time. Although this won’t increase your credit rating straight away, it will ensure that your rating doesn’t drop any further. You might want to create automatic bill payments with 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 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 enhance your credit rating but it will enable you to increase your liquid assets, presenting you with more possibilities. If you’re in a position where you can acquire a weekend job, you should honestly consider it. Or take a look at your interests and try to discover 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 terrific idea.
Even though filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s essential that you evaluate the reasons that created your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating progressively, and adhering to a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Sunshine Coast today on 1300 795 575 or visit www.bankruptcyexpertssunshinecoast.com.au