There’s no doubt that are some considerable financial consequences in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this situation, don’t be alarmed. The tough economic times experienced today means that more and more individuals are declaring bankruptcy. As a matter of fact, there are around 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s imperative 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 modifications 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 typical for people who file for bankruptcy to experience emotions of failure, self-loathing and guilt. Though it may seem natural have these feelings, becoming bankrupt is the result of simply 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 succumb to these negative feelings, the longer it will take to recover. Dealing with your financial difficulties is the first step in overcoming them, so you’re certainly in a better position than you were prior to declaring bankruptcy.
It’s essential that you review the reasons why you became bankrupt to make certain you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. While there’s probably a number of reasons why you filed for bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a smart idea to produce a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these oversights again.
Create a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to put together a rational and manageable budget. You’ll have to inspect your income and expenses carefully, and develop a way to save money while still paying all your living expenses. Even if it means that you downsize your house or relinquish some luxury items, becoming financially responsible is your leading priority. There are some simple ways to save money, for example eating at home rather than eating in restaurants and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The very first step in mending your bad credit rating is to make sure that you pay all your bills on time. Whilst this won’t improve your credit rating immediately, it will ensure that your credit rating doesn’t decrease any further. You might wish 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 regarded as the single, most powerful 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. Consistent income over time will not only increase your credit rating but it will permit you to increase your liquid assets, presenting you with more opportunities. If you’re in a situation where you can obtain a weekend job, you should sincerely consider it. Or have a look at your interests and attempt to create a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a wonderful idea.
Whilst filing for bankruptcy is never an easy decision, it is the very first step in confronting your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s vital that you evaluate the reasons that resulted in your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating gradually, and following a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Coffs Harbour today on 1300 795 575 or visit www.bankruptcyexpertscoffsharbour.com.au