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 situation, don’t be alarmed. The challenging economic times observed today means that an increasing number of people are declaring bankruptcy. As a matter of fact, there are around 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s imperative 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 will need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after filing for bankruptcy.
It’s usual for individuals who declare bankruptcy to experience feelings of failure, self-loathing and remorse. Even though it may seem natural have these thoughts, becoming 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 initial step towards financial freedom, and recovering from a bad credit rating is easier than you think. The longer you give in to these negative feelings, the longer it will take to recover. Facing 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 look at the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Filing for bankruptcy gives 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 range of reasons why you declared bankruptcy, all of them probably relate to poor spending and borrowing habits. So it’s a smart 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.
Create a budget
After you’ve recovered emotionally from bankruptcy, the next step is to develop a practical and attainable budget. You’ll have to inspect your earnings and expenses thoroughly, and develop 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 sound is your key priority. There are some easy ways to save money, for example eating at home as opposed to eating out and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to make sure that you pay all your bills on time. Although this won’t increase your credit rating straight away, it will ensure that your credit rating doesn’t decrease any further. You might wish to set up automatic bill payments with your bank to guarantee 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 regarded as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t already got stable employment, now is the time to do so. Consistent income over time will not only improve your credit rating but it will permit you to increase your liquid assets, providing you with more choices. If you’re in a position where you can acquire a weekend job, you should sincerely consider it. Or take a look at your hobbies and aim to discover a way to increase your earnings by doing something that you love. 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 first step in confronting your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you evaluate 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 eventually, and sticking to a budget is very important. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Mildura today on 1300 795 575 or visit www.bankruptcyexpertsmildura.com.au