Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial repercussions involved and your financial freedom will be restricted for many years to come. This doesn’t indicate that filing for bankruptcy is the end of the world though. It should actually be regarded as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy every year and a lot of them are able to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will most definitely give you insight into making better financial decisions in the future.
In essence, once you have declared bankruptcy, you hand over control of your finances and assets to a Trustee in exchange 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 implies that the financial restraints you sustained 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 file for 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 leave the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll need to supply a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior approval from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years rather than three.
You Will Be Offered Credit Straight Away
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a large variety of creditors. The main reason behind this is that you won’t have the capacity to declare bankruptcy again for an extensive period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. In some cases, acquiring a loan and making timely repayments will help improve your credit history, which will assist you in the recovery process. But be cautious, 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 record slowly.
Buying A Home Is Definitely Possible
There’s a popular misconception that when you declare bankruptcy, you will no longer be able to acquire credit for a home loan. This is definitely not the case. Although bankruptcy will leave you with a bad credit record, you can still purchase a home if you manage to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you exhibit 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 wisely before even considering securing a home loan.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should examine their credit report at least twice a year. After initially filing for bankruptcy though, it’s important that you look at your credit report every month for at least the first six months into your bankruptcy. Certain 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 avoid any further difficulties, it’s critical that you keep an eye on your credit report to make sure it’s accurate and up to date.
Though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial restraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Attaining home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Therefore, it’s vital 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 should be considered to ensure a smooth recovery process. If you’re considering filing for bankruptcy, speak to Bankruptcy Experts Shepparton on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsshepparton.com.au