There’s no doubt that are some serious financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this position, don’t be alarmed. The tough economic times experienced today means that an increasing number of individuals are filing for bankruptcy. In reality, there are close to 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s essential that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some adjustments 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 declaring bankruptcy.
It’s typical for people who declare bankruptcy to feel feelings of failure, self-loathing and regret. Whilst it may seem natural have these thoughts, being bankrupt is the result of merely another mistake that we all make as humans. You should 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 succumb to these negative feelings, the longer it will take to recover. Addressing your financial difficulties 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 critical that you take a look at the reasons why you became bankrupt to ensure 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. Though 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 produce 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
Once you’ve bounced back emotionally from bankruptcy, the next step is to make a rational and achievable budget. You’ll have to look at your earnings and expenses carefully, and develop a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or do away with some luxury items, becoming financially stable is your leading priority. There are some easy ways to save money, for instance eating at home instead of dining in restaurants and revoking your gym membership in favour of walking to work. Remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The 1st step in restoring your bad credit rating is to ensure you pay all your bills on time. Whilst this won’t boost your credit rating straight away, it will ensure that your credit rating doesn’t go down any further. You might prefer 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 thought to be the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t currently got consistent employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will enable you to increase your liquid assets, presenting you with more choices. If you’re in a position where you can obtain a weekend job, you should sincerely consider it. Or have a look at your interests and aim to develop a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a terrific idea.
While filing for bankruptcy is never an easy decision, it is the very first step in confronting your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that led to your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating gradually, and following a budget is very important. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Advice Perth today on 1300 879 867 or visit www.bankruptcy-advice.com.au/perth