Bankruptcy is not a decision that should be taken lightly. There are some harsh financial consequences involved and your financial freedom will be constrained for years to come. This doesn’t suggest that declaring bankruptcy is the end of the world though. It should really be considered as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy every year and most of them have the ability to buy homes, cars and acquire credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will definitely give you insight into making better financial decisions in the future.
Basically, once you have declared bankruptcy, you give up control of your finances and assets to a Trustee for protection against legal proceeding that could be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which implies that the financial restraints you incurred during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article tries to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the limitations 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 information 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 permission from your bankruptcy Trustee, and in many cases will increase the length of your undischarged bankruptcy to a minimum of five years instead of three.
You Will Be Offered Credit Instantly
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a vast array of creditors. The explanation behind this is that you won’t be able to declare bankruptcy again for a long 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, securing a loan and making timely repayments will help improve your credit rating, which will help 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 trick is to rebuild your credit record gradually.
Buying A Home Is Certainly Possible
There’s a frequent misconception that whenever you file for bankruptcy, you will no longer have the capacity to acquire credit for a home loan. This is definitely not the case. Although bankruptcy will leave you with a poor credit rating, you can still buy a home if you have the capacity to rebuild your credit within a few years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Naturally, you won’t have the ability to obtain a mortgage straight after you’re discharged, so it’s very important to build your credit rating intelligently before even thinking about securing a mortgage.
Check Your Credit Frequently
Most financial experts recommend that discharged bankrupts should check their credit report around twice a year. After initially declaring bankruptcy though, it’s important that you look at your credit report each month for at least the first 6 months into your bankruptcy. Various creditors may still be demanding payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to steer clear of any further complications, it’s crucial that you keep an eye on your credit report to make sure it’s accurate and up to date.
Even though bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial restraints imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Attaining 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. For this reason, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to should be taken into consideration to ensure a smooth recovery process. If you’re thinking about declaring bankruptcy, speak to Bankruptcy Experts Wyong on 1300 795 575 or visit their website for more details: www.bankruptcyexpertswyong.com.au