There’s no doubt that bankruptcy isn’t the most desirable scenario to be experiencing. There are some harsh financial consequences involved and it’s a very difficult and stressful process that will affect you financially for several years to come. Finding yourself in mountains of debt can happen in the blink of an eye, and lots of people end up in this situation because of a number of factors. Not having the capacity to work due to illness is one of the most frequent reasons individuals file for bankruptcy. It’s not as if they had any control over the situation, but being unable to settle their debts due to the fact that they have no income is the hard reality they must face. As a matter of fact, 7,900 people in Australia filed for bankruptcy in the March 2017 quarter1, so it’s not as unusual as some people believe. If you ask me, I think that bankruptcy is neither good nor bad. Without a doubt, those who declare bankruptcy have made some bad financial decisions and will reprimanded accordingly, nonetheless filing for bankruptcy is also the first step to financial freedom. Some folks struggle for years just to make ends meet, whilst their debts keep worsening, so in a lot of cases, bankruptcy is a chance for a clean slate for those that are unable to repay their debts.
Though I’ve never been bankrupt myself, I’ve witnessed the journey of many individuals who have and surprisingly, lots of people are better off and glad they underwent the process. If you’re grappling with financial problems and considering bankruptcy, this post will outline what life is like after you file for bankruptcy.
You Will Not Be Debt Free By Declaring Bankruptcy
Bankruptcy is quite complicated, and there is a common misconception that all debts are removed by declaring bankruptcy. This is definitely not the case. There are numerous debts that won’t be removed, including Centrelink debts, HECS debts, child support, court imposed fines (for instance speeding tickets), and money that is owed to an insurance company resulting from a car accident where you were uninsured and liable. Conversely, declaring bankruptcy will eliminate debts like credit cards, GST and tax, and unsecured personal loans. The truth is, you will still have debts to pay after you declare bankruptcy, but the most substantial debts in most cases, such as credit cards, will be eliminated.
Feelings Of Guilt And Humiliation Are Standard
Bankruptcy is an arduous process and many individuals who declare bankruptcy have feelings of remorse and embarrassment; as if they’ve lost in life. This is natural, however it’s imperative to overcome these emotions because the fact is, humans make mistakes, and bankruptcy is a way that you can make a fresh start financially and get your life back on track. The sooner you recover from these feelings of remorse, the sooner you’ll be able to begin the recovery process and create a plan of how you’re going to repay your remaining debts and rebuild your credit report. Always remember, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit rating, so it’s definitely not the end of the world.
You Can’t Borrow Any Money For Three Years
Unfortunately, by declaring bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s paramount that you start rebuilding your credit rating by maintaining a consistent income and paying your bills and remaining debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the option to obtain loans for secured assets like houses and cars, but your interest rates will be much higher as a result of your poor credit report. Even though it’s not always sensible to acquire loans straight away, it is possible. After seven years from the time you became bankrupt, your credit history will be clean, and you will have the option to secure all sorts of loans again at competitive rates.
Life after filing for bankruptcy obviously isn’t easy, but the emotional relief that many individuals experience after starting the process definitely softens the blow. There are some severe financial implications 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 enduring financial distress, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep struggling financially for years because you fear the stigma connected with bankruptcy. It’s not easy, but it’s also not the end of the world. If you ‘d like to speak to someone about your financial condition, get in touch with Bankruptcy Experts Brisbane on 1300 795 575 for a confidential discussion, or alternatively visit their website for more details: http://www.bankruptcyexpertsbrisbane.com.au