There’s no doubt that are some tough financial repercussions in filing for bankruptcy, and there’s no question that your life will encounter some considerable changes. If you’re in this position, don’t be alarmed. The tough economic times experienced today means that more and more people are declaring bankruptcy. As a matter of fact, there are close to 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s vital 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 improvements 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 usual for people who declare bankruptcy to feel emotions of failure, self-loathing and remorse. Whilst it may seem natural have these emotions, being bankrupt is the result of merely another mistake that we all make as humans. You need 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 easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Confronting your financial issues is the first step in overcoming them, so you’re already in a better position than you were before filing for bankruptcy.
It’s paramount that you examine the reasons why you became bankrupt to make sure that 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 bad 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 mistakes again.
Make a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to put together a rational and manageable budget. You’ll need to look at your earnings and expenses carefully, 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 forego some luxury items, becoming financially stable is your key priority. There are some practical ways to save money, for example eating at home as opposed to dining in restaurants and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The very first step in repairing your bad credit rating is to make sure you pay all your bills on time. Although this won’t increase your credit rating instantly, it will ensure that your rating doesn’t go down any further. You might wish to create automatic bill payments through 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 thought to be the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t presently got consistent employment, now is the time to do so. Consistent income over time will not only enhance your credit rating but it will allow you to increase your liquid assets, providing you with more choices. If you’re in a situation where you can obtain a weekend job, you should genuinely consider it. Or have a look at your hobbies and try to discover 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 a fantastic idea.
Even though filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s essential that you evaluate 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 sticking to a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Penrith today on 1300 795 575 or visit www.bankruptcyexpertspenrith.com.au