There’s no doubt that are some serious financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this predicament, don’t be alarmed. The tough economic times witnessed today means that a growing number of individuals are declaring bankruptcy. Actually, there are as much as 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s critical 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 will need to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after declaring bankruptcy.
It’s usual for individuals who file for bankruptcy to feel feelings of failure, self-loathing and guilt. Whilst it may seem natural have these feelings, becoming bankrupt is the result of merely another mistake that all of us make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you give in to these negative feelings, the longer it will take to recover. Confronting your financial problems is the first step in overcoming them, so you’re actually in a better position than you were before filing for bankruptcy.
It’s vital that you review 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. While there’s probably a variety of reasons why you filed for bankruptcy, all of them probably pertain to bad spending and borrowing habits. So it’s a good idea to produce a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these mistakes again.
Make a budget
Once you’ve recovered emotionally from bankruptcy, the next step is to put together a rational and achievable budget. You’ll need to examine your income 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 sacrifice some luxury items, becoming financially sound is your key priority. There are some simple ways to save money, like eating at home as an alternative to eating out and cancelling your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The 1st step in repairing your bad credit rating is to make sure that you pay all your bills on time. Though this won’t increase your credit rating immediately, it will ensure that your credit rating doesn’t decrease any further. You might prefer to set up automatic bill payments through your bank to ensure 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 regarded as the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got steady employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will enable you to increase your liquid assets, presenting you with more opportunities. If you’re in a situation where you can obtain a weekend job, you should sincerely consider it. Or have a look at your hobbies and aim to come up with a way to increase your earnings by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is a wonderful idea.
Whilst declaring bankruptcy is never an easy decision, it is the first step in confronting your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s essential that you evaluate the reasons that led to your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating gradually, and following a budget is paramount. If you’re thinking about declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Brisbane today on 1300 795 575 or visit www.bankruptcyexpertsbrisbane.com.au