There’s no doubt that are some substantial financial consequences in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this scenario, don’t be alarmed. The difficult economic times witnessed today means that a growing number of people are declaring bankruptcy. In reality, there are close to 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s crucial 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 improvements need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after filing for bankruptcy.
It’s typical for those who declare bankruptcy to feel feelings of failure, self-loathing and guilt. Although it may seem natural have these feelings, being bankrupt is the result of merely another mistake that we all make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the initial step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Addressing your financial difficulties is the first step in overcoming them, so you’re actually in a better position than you were before filing for bankruptcy.
It’s crucial that you look at the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for 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 possibly a number of reasons why you filed for bankruptcy, most of them probably relate to bad spending and borrowing habits. So it’s a smart idea to create a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these oversights again.
Make a budget
Once you’ve recouped emotionally from bankruptcy, the next step is to make a realistic and achievable budget. You’ll need to consider your earnings and expenses closely, and formulate a way to save money while still paying all your living expenses. Even if it means that you downsize your house or sacrifice some luxury items, becoming financially sound is your main priority. There are some simple ways to save money, for example eating at home as opposed to eating in restaurants 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 first step in repairing your bad credit rating is to make sure that you pay all your bills on time. Whilst this won’t improve your credit rating straight away, it will ensure that your rating doesn’t go down any further. You might choose to create automatic bill payments with 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 regarded as the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t presently got stable employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will permit you to increase your liquid assets, providing you with more possibilities. If you’re in a position where you can obtain a weekend job, you should seriously consider it. Or have a look at your hobbies and attempt to develop a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is a terrific idea.
Although declaring bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s important that you assess the reasons that triggered your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating gradually, and sticking to a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Dubbo today on 1300 795 575 or visit www.bankruptcyexpertsdubbo.com.au