There’s no doubt that are some heavy financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this predicament, don’t be alarmed. The challenging economic times experienced today means that an increasing number of people are declaring bankruptcy. In reality, there are as much as 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s essential 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 changes will need 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 declaring bankruptcy.
It’s usual for those who declare bankruptcy to experience emotions of failure, self-loathing and regret. Though it may seem natural have these thoughts, becoming bankrupt is the result of merely another mistake that all of us 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 much easier than you think. The longer you give in to these negative feelings, the longer it will take to recover. Addressing 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 examine the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. Whilst there’s possibly a range of reasons why you filed for bankruptcy, most of them probably pertain 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 filing for bankruptcy and commit yourself to not making these oversights again.
Make a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to make a practical and attainable budget. You’ll need to assess 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 do away with some luxury items, becoming financially sound is your key priority. There are some easy ways to save money, for instance eating at home instead of eating in restaurants and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to ensure you pay all your bills on time. Even though this won’t boost your credit rating instantly, it will ensure that your credit rating doesn’t drop any further. You might choose to set up automatic bill payments with your bank to ensure that you don’t miss 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 effective action you can take to restore your credit rating.
Increase your income
If you haven’t already got stable employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will enable you to increase your liquid assets, providing you with more opportunities. If you’re in a situation where you can acquire a weekend job, you should really consider it. Or take a look at your hobbies and try to create 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 a terrific idea.
While declaring bankruptcy is never an easy decision, it is the first step in confronting your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s vital that you review the reasons that caused your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating progressively, and following a budget is extremely important. If you’re considering declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Adelaide today on 1300 795 575 or visit www.bankruptcyexpertsadelaide.com.au