There’s no doubt that are some heavy financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this position, don’t be alarmed. The challenging economic times witnessed today means that a growing number of people are declaring bankruptcy. Actually, 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 important 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 modifications have to be made to secure a bright future for you and your family. So here are a couple of simple strategies that you can use to best recover after declaring bankruptcy.
It’s common for those who file for bankruptcy to experience feelings of failure, self-loathing and regret. Whilst it may seem natural have these emotions, becoming bankrupt is the result of just another mistake that all of us make as humans. You have to 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. Dealing with your financial problems is the first step in overcoming them, so you’re already in a better position than you were prior to filing for bankruptcy.
It’s crucial that you examine the reasons why you became bankrupt to ensure you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in shape, 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 smart idea to produce a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.
Create a budget
Once you’ve bounced back emotionally from bankruptcy, the next step is to create a rational and achievable budget. You’ll want to look at your earnings and expenses thoroughly, 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 do away with some luxury items, becoming financially healthy is your leading priority. There are some easy 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 unforeseen expenses.
Pay your bills on time
The very first step in restoring your bad credit rating is to make sure you pay all your bills on time. Though this won’t boost 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 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 effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got consistent employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will allow you to increase your liquid assets, presenting you with more possibilities. If you’re in a position where you can get a weekend job, you should genuinely consider it. Or have a look at your interests and aim to come up with a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is an excellent idea.
Even though filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you assess the reasons that resulted in your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating eventually, and following a budget is extremely important. If you’re considering declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Taree today on 1300 795 575 or visit www.bankruptcyexpertstaree.com.au