There’s no doubt that are some heavy financial repercussions in declaring bankruptcy, and there’s no question that your life will encounter some considerable changes. If you’re in this scenario, don’t be alarmed. The difficult economic times witnessed today means that more and more individuals are declaring bankruptcy. In reality, there are about 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s crucial 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 changes have to be made to secure a bright future for you and your family. So here are a few simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for individuals who declare bankruptcy to experience emotions of failure, self-loathing and guilt. Although it may seem natural have these thoughts, being bankrupt is the result of simply another mistake that we all make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the very first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Confronting your financial troubles is the first step in overcoming them, so you’re actually in a better position than you were prior to declaring bankruptcy.
It’s imperative that you look at the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Though there’s possibly a number of reasons why you declared bankruptcy, most of them probably pertain to poor spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these errors again.
Create a budget
Once you’ve recuperated emotionally from bankruptcy, the next step is to develop a practical and attainable budget. You’ll want to examine your income and expenses closely, and formulate 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 healthy is your main priority. There are some simple ways to save money, such as eating at home as opposed to 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 repairing your bad credit rating is to make sure you pay all your bills on time. Whilst this won’t increase your credit rating instantly, it will ensure that your rating doesn’t drop any further. You might wish to set up automatic bill payments through 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 steady employment, now is the time to do so. Regular income over time will not only strengthen your credit rating but it will allow you to increase your liquid assets, presenting you with more options. 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 aim to discover a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a wonderful idea.
Whilst declaring 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 vital that you review 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 sticking to a budget is extremely important. If you’re thinking about declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Cairns today on 1300 795 575 or visit www.bankruptcyexpertscairns.com.au