There’s no doubt that are some substantial financial repercussions in filing for bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this situation, don’t be alarmed. The tough economic times witnessed today means that an increasing number of individuals are declaring bankruptcy. In fact, there are roughly 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s imperative 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 have to be made to secure a bright future for you and your family. So here are several simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for those who file for bankruptcy to feel feelings of failure, self-loathing and regret. Although it may seem natural have these emotions, being bankrupt is the result of simply 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 easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Dealing with your financial problems is the first step in overcoming them, so you’re actually in a better position than you were before declaring bankruptcy.
It’s necessary that you take a look at the reasons why you became bankrupt to make certain 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. Although there’s probably a number of reasons why you declared bankruptcy, all of them probably relate to poor spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these oversights again.
Make a budget
After you’ve recovered emotionally from bankruptcy, the next step is to put together a realistic and manageable budget. You’ll need to consider your income and expenses closely, and figure out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or forfeit some luxury items, becoming financially sound is your primary priority. There are some simple ways to save money, for instance eating at home rather than eating in restaurants 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 initial step in repairing your bad credit rating is to make sure that you pay all your bills on time. Whilst this won’t boost your credit rating straight away, it will ensure that your rating doesn’t decrease any further. You might prefer to create automatic bill payments through your bank to ensure that you don’t overlook 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 considered as the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t already got consistent employment, now is the time to do so. Consistent income over time will not only enhance your credit rating but it will enable you to increase your liquid assets, presenting you with more opportunities. If you’re in a position where you can get a weekend job, you should seriously consider it. Or take a look at your interests and attempt 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 earnings is an excellent idea.
Whilst filing for bankruptcy is never an easy decision, it is the very first step in addressing your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you assess the reasons that created your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating eventually, and following a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Parramatta today on 1300 795 575 or visit www.bankruptcyexpertsparramatta.com.au