Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial consequences involved and your financial freedom will be confined for many years to come. This doesn’t indicate 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 many of them have the capacity to buy homes, cars and attain credit cards after they’re discharged. Further to this, understanding what life is like after you have filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
Basically, once you have declared bankruptcy, you surrender control of your finances and assets to a Trustee for protection against litigation that may be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which implies that the financial restrictions you incurred during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article tries to achieve is to give you an understanding of what happens after you declare 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 only if you request permission from your Trustee. To do this, you’ll have to supply a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior approval from your bankruptcy Trustee, and in many cases will increase the length of your undischarged bankruptcy to a minimum of five years rather than three.
You Will Be Offered Credit Instantly
One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a large variety of creditors. The explanation behind this is that you won’t be able to file for 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, obtaining a loan and making timely repayments will help improve your credit score, which will help you in the recovery process. But be careful, you don’t want to accept every offer thrown in your direction as some lending institutions are very dubious and include hidden fees and charges that can put you in debt again instantly. The key is to rebuild your credit rating steadily.
Buying A Home Is Certainly Possible
There’s a regular misconception that whenever you declare bankruptcy, you will no longer have the chance to secure credit for a home loan. This is certainly not the case. Although bankruptcy will leave you with a bad credit record, you can still buy a home if you manage to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Naturally, you won’t have the capacity to get a home loan straight after you’re discharged, so it’s very important to build your credit record sensibly before even envisioning securing a mortgage.
Check Your Credit Regularly
Most financial experts recommend that discharged bankrupts should examine their credit report about twice a year. After initially declaring bankruptcy though, it’s critical that you examine your credit report every month for at least the first six months into your bankruptcy. Some creditors may still be requesting 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 complications, it’s crucial that you keep an eye on your credit report to ensure it’s accurate and up to date.
While bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial limitations imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Securing a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and executed. Thus, it’s vital that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is very complicated and there are many factors to must be taken into account to ensure a smooth recovery process. If you’re contemplating declaring bankruptcy, reach out to Bankruptcy Experts Adelaide on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsadelaide.com.au