There’s no doubt that are some considerable financial consequences in filing for bankruptcy, and there’s no question that your life will experience some significant changes. If you’re in this situation, don’t be alarmed. The tough economic times experienced today means that more and more individuals are filing for bankruptcy. In reality, there are around 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s vital that you look towards the future and aim to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some alterations 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 usual for people who file for bankruptcy to feel emotions of failure, self-loathing and regret. Even though it may seem natural have these thoughts, becoming bankrupt is the result of just another mistake that all of us make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the initial step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you succumb 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 prior to filing for bankruptcy.
It’s necessary that you take a look at the reasons why you became bankrupt to ensure you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. While there’s probably a range of reasons why you filed for bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these oversights again.
Create a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to make a realistic and attainable budget. You’ll have to consider your income and expenses carefully, and figure out 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 responsible is your primary priority. There are some easy ways to save money, such as eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unanticipated 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 increase your credit rating immediately, it will ensure that your credit rating doesn’t go down any further. You might wish to create automatic bill payments through your bank to guarantee 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 the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t already got steady employment, now is the time to do so. Regular income over time will not only strengthen your credit rating but it will permit you to increase your liquid assets, presenting you with more opportunities. If you’re in a situation where you can get a weekend job, you should genuinely consider it. Or have a look at your hobbies and attempt to come up with a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is a great idea.
Even though declaring bankruptcy is never an easy decision, it is the very first step in confronting your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s essential that you assess the reasons that triggered your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating gradually, and following a budget is extremely important. If you’re considering filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Tweed Coast today on 1300 795 575 or visit Bankruptcy Tweedcoast