There’s no question that bankruptcy isn’t a desirable situation to be dealing with. There are some severe financial implications involved and it’s a very challenging and stressful process that will affect you financially for years to come. Finding yourself in mountains of debt can transpire in the blink of an eye, and lots of people find themselves in this situation due to a wide range of factors. Not being able to work resulting from illness is one of the most common reasons people declare bankruptcy. It’s not as if they had any control over the situation, but being unable to pay their debts considering that they have no income is the hard reality they will have to face. In reality, 7,900 individuals in Australia declared bankruptcy in the March 2017 quarter1, so it’s not as uncommon as some people think. If you ask me, I think that bankruptcy is neither good nor bad. Certainly, those who declare bankruptcy have made some bad financial decisions and will penalised as necessary, nevertheless declaring bankruptcy is also the first step to financial freedom. Some individuals struggle for years just to make ends meet, while their debts keep worsening, so often times, bankruptcy is an opportunity for a new beginning for those people that are unable to repay their debts.
While I’ve never been bankrupt myself, I’ve witnessed the journey of lots of people who have and surprisingly, most individuals are better off and glad they underwent the process. If you’re enduring financial difficulties and contemplating bankruptcy, this post will detail what life is like after you file for bankruptcy.
You Won’t Be Completely Debt Free By Declaring Bankruptcy
Bankruptcy is pretty complicated, and there is a standard misconception that all debts are eliminated by filing for bankruptcy. This is definitely not the case. There are numerous debts that won’t be removed, for instance Centrelink debts, HECS debts, child support, court imposed fines (like speeding tickets), as well as money that is owed to an insurance provider arising from a car accident where you were uninsured and liable. Alternatively, filing for bankruptcy will eliminate debts such as credit cards, GST and tax, and unsecured personal loans. The fact is, you will still have debts to pay after you declare bankruptcy, but the most critical debts in most cases, such as credit cards, will be eliminated.
Feelings Of Regret And Humiliation Are Standard
Bankruptcy is a stressful process and lots of folks who file for bankruptcy have feelings of remorse and humiliation; as if they’ve lost in life. This is regular, however it’s essential to overcome these emotions because the reality is, humans make mistakes, and bankruptcy is a way that you can start a new beginning financially and get your life back on the right track. The sooner you recover from these feelings of regret, the sooner you’ll be able to begin the recovery process and craft a plan of how you’re going to repay your outstanding debts and rebuild your credit history. Just remember, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit rating, so it’s certainly not the end of the world.
You Can’t Borrow Any Money For Three Years
Unfortunately, by filing for bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s imperative that you start rebuilding your credit report by maintaining a regular income and paying your bills and outstanding debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the chance to receive loans for secured assets like houses and cars, but your interest rates will be much higher because of your bad credit report. Although it’s not always sensible to secure loans straight away, it is possible. After seven years from the time you became bankrupt, your credit report will be clean, and you will have the chance to secure all forms of loans again at competitive rates.
Life after filing for bankruptcy definitely isn’t easy, but the emotional relief that many people experience after starting the process definitely softens the blow. There are some considerable financial repercussions involved, but filing for bankruptcy is the first step towards financial freedom and securing a bright future for you and your family. If you’re confronting financial hardship, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep struggling financially for years because you’re afraid of the stigma connected with bankruptcy. It’s difficult, but it’s also not the end of the world. If you ‘d like to speak with someone about your financial condition, get in contact with Bankruptcy Experts Wyong on 1300 795 575 for a confidential discussion, or alternatively visit their website for more information: http://www.bankruptcyexpertswyong.com.au