Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial implications involved and your financial freedom will be constrained for years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy each year and the majority of them have the ability to buy homes, cars and acquire credit cards after they’re discharged. In addition to this, understanding what life is like after you have filed for bankruptcy will not surprisingly give you insight into making better financial decisions in the future.
Ultimately, once you have filed for bankruptcy, you give up control of your finances and assets to a Trustee for protection against legal action that might be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which signifies that the financial stipulations 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 aspires 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 drawbacks of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to supply a lot of details relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel internationally without prior permission from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Straight Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a variety of lenders. The 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. Sometimes, securing a loan and making timely repayments will help strengthen your credit history, which will help you in the recovery process. But be mindful, you don’t want to accept every offer thrown in your direction as some creditors are very dubious and include hidden fees and charges that can put you in debt again immediately. The key is to rebuild your credit rating progressively.
Buying A Home Is Definitely Possible
There’s a general misconception that whenever you declare bankruptcy, you will no longer have the capacity to obtain credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a poor credit record, you can still purchase a home if you’re able to rebuild your credit within a few years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Obviously, you won’t be able to acquire a mortgage straight after you’re discharged, so it’s necessary to build your credit record sensibly before even envisioning securing a home loan.
Check Your Credit On A Regular Basis
Most financial specialists recommend that discharged bankrupts should review their credit report about twice a year. After initially declaring bankruptcy though, it’s crucial that you inspect your credit report each month for at least the first 6 months into your bankruptcy. A couple of 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 prevent any further difficulties, it’s pressing that you keep an eye on your credit report to make sure that it’s correct and up to date.
Whilst bankruptcy isn’t the preferred position to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial constraints imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re perfectly capable of securing a bright financial future. Obtaining home loans and other credit lines will be possible a few years after discharge if the recovery process is well-planned and implemented. Therefore, it’s essential that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to must be taken into consideration to ensure a smooth recovery process. If you’re contemplating filing for bankruptcy, talk to Bankruptcy Experts Dubbo on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsdubbo.com.au