There’s no doubt that are some serious financial consequences in declaring bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this position, don’t be alarmed. The challenging economic times observed today means that an increasing number of people are declaring bankruptcy. Actually, there are about 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s critical that you look towards the future and try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some improvements will need to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after declaring bankruptcy.
It’s usual for those who declare bankruptcy to experience emotions of failure, self-loathing and regret. Even though it may seem natural have these feelings, being bankrupt is the result of simply another mistake that we all make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Addressing your financial problems is the first step in overcoming them, so you’re already in a better position than you were before filing for bankruptcy.
It’s critical that you review the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Declaring 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 probably a variety of reasons why you declared bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a smart idea to create a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these oversights again.
Create a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to make a rational and attainable budget. You’ll need to review your income and expenses closely, 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 forfeit some luxury items, becoming financially stable is your primary priority. There are some easy ways to save money, like eating at home as an alternative to eating in restaurants and cancelling 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 you pay all your bills on time. While this won’t improve your credit rating immediately, it will ensure that your rating doesn’t decrease any further. You might wish to set up automatic bill payments with 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 powerful 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 opportunities. If you’re in a position where you can obtain a weekend job, you should genuinely consider it. Or take a look at your hobbies and aim to create a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a terrific idea.
Although declaring bankruptcy is never an easy decision, it is the first step in addressing your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s important that you assess the reasons that brought about your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating progressively, and adhering to a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Wyong today on 1300 795 575 or visit www.bankruptcyexpertswyong.com.au