Bankruptcy is not a decision that should be taken lightly. There are some major financial consequences involved and your financial freedom will be restricted for several years to come. This doesn’t indicate that declaring bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy every year and many of them have the ability to buy homes, cars and attain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will evidently give you insight into making better financial decisions in the future.
Ultimately, once you have filed for bankruptcy, you forfeit control of your finances and assets to a Trustee for protection against litigation that could be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which means that the financial restraints you sustained during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aspires to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the disadvantages of declaring bankruptcy is that you cannot leave the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll need to supply a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior consent from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to a minimum of five years instead of three.
You Will Be Offered Credit Right Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large variety of loan providers. The explanation behind this is that you won’t be able to declare bankruptcy again for an extensive period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In some cases, obtaining a loan and making timely repayments will help strengthen your credit score, which will aid you in the recovery process. But be cautious, you don’t want to take every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again straight away. The key is to rebuild your credit history gradually.
Buying A Home Is Certainly Possible
There’s a regular misconception that after you file for bankruptcy, you will no longer have the opportunity to secure credit for a mortgage. This is definitely not the case. Whilst bankruptcy will leave you with a bad credit score, you can still buy a home if you have the ability to rebuild your credit within a few years, you pay all your bills on time, and you demonstrate a responsible use of credit. Obviously, you won’t have the ability to obtain a home loan straight after you’re discharged, so it’s important to build your credit rating wisely before even contemplating securing a home loan.
Check Your Credit Frequently
Most financial specialists recommend that discharged bankrupts should take a look at their credit report around twice a year. After initially declaring bankruptcy though, it’s critical that you take a look at your credit report each month for at least the first six months into your bankruptcy. Certain creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to prevent any further difficulties, it’s crucial that you keep an eye on your credit report to ensure it’s correct and up to date.
Even though bankruptcy isn’t the preferred position to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial restrictions imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re perfectly capable of securing a bright financial future. Securing a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and executed. Consequently, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is very complicated and there are many factors to have to be taken into account to ensure a smooth recovery process. If you’re considering filing for bankruptcy, phone Bankruptcy Experts Mildura on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsmildura.com.au