There’s no doubt that are some substantial financial consequences in filing for bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this position, don’t be alarmed. The tough economic times experienced today means that an increasing number of individuals are declaring bankruptcy. In reality, there are approximately 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 try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some changes 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 filing for bankruptcy.
It’s typical for people who file for bankruptcy to experience feelings of failure, self-loathing and remorse. Although 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 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. Dealing with your financial troubles is the first step in overcoming them, so you’re actually in a better position than you were prior to filing for bankruptcy.
It’s necessary that you examine the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Declaring bankruptcy gives you a second chance to get your finances in order, so it’s best you make the most of it. Even though there’s probably a variety of reasons why you declared bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a good idea to make a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these errors again.
Make a budget
After you’ve recouped emotionally from bankruptcy, the next step is to develop a rational and manageable budget. You’ll need to consider your income and expenses thoroughly, and formulate a way to save money while still paying all your living expenses. Even if it means that you downsize your house or bypass some luxury items, becoming financially sound is your leading priority. There are some simple ways to save money, for instance eating at home as an alternative to eating out and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The first step in mending your bad credit rating is to ensure that you pay all your bills on time. Although this won’t boost your credit rating straight away, it will ensure that your rating doesn’t go down any further. You might prefer 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 thought to be the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got stable employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will enable you to increase your liquid assets, presenting you with more possibilities. If you’re in a situation where you can get a weekend job, you should honestly consider it. Or take a look at your hobbies and aim 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 income is an excellent idea.
While filing for bankruptcy is never an easy decision, it is the very first step in confronting your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you evaluate 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 sticking to a budget is extremely important. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Shepparton today on 1300 795 575 or visit www.bankruptcyexpertsshepparton.com.au