Bankruptcy is not a decision that should be taken lightly. There are some harsh financial implications involved and your financial freedom will be restricted for many years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should really be thought of as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy every year and the majority of them are able to buy homes, cars and attain credit cards after they’re discharged. Further 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.
In simple terms, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee for protection against legal action that could be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which signifies that the financial restrictions 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 intends to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the restraints of declaring bankruptcy is that you can’t exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have 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 internationally without prior consent from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Right Away
One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a large range of loan providers. The explanation behind this is that you won’t have the ability to declare bankruptcy again for a lengthy period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In certain situations, securing a loan and making timely repayments will help strengthen your credit history, which will assist you in the recovery process. But be careful, you don’t want to accept 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 instantly. The key is to rebuild your credit score steadily.
Buying A Home Is Definitely Possible
There’s a common misconception that after you declare bankruptcy, you will no longer have the opportunity to secure credit for a home loan. This is certainly not the case. Whilst bankruptcy will leave you with a bad credit rating, you can still purchase a home if you have the ability to rebuild your credit within a couple of years, you pay all your bills on time, and you demonstrate a responsible use of credit. Of course, you won’t be able to acquire a home loan straight after you’re discharged, so it’s essential to build your credit history intelligently before even considering securing a home loan.
Check Your Credit Frequently
Most financial experts recommend that discharged bankrupts should examine their credit report around twice a year. After initially filing for bankruptcy though, it’s important that you check your credit report monthly for at least the first 6 months into your bankruptcy. Various creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to prevent any further difficulties, it’s necessary that you keep track of your credit report to ensure it’s correct and up to date.
Though bankruptcy isn’t the ideal position to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial constraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Attaining a mortgage and other credit lines will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Hence, it’s essential 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 need to be considered to ensure a smooth recovery process. If you’re contemplating filing for bankruptcy, talk to Bankruptcy Experts Tweed Coast on 1300 795 575 or visit their website for additional information: Bankruptcy Tweedcoast