Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial consequences involved and your financial freedom will be restrained for years to come. This doesn’t indicate that declaring bankruptcy is the end of the world though. It should actually be regarded as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy every year and the majority of them have the capacity to buy homes, cars and obtain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will evidently give you insight into making better financial decisions in the future.
Fundamentally, once you have declared bankruptcy, you hand over control of your finances and assets to a Trustee for protection against litigation that might be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a specific period of time (in most cases three years) after which time you’ll become discharged, which means that the financial restrictions you sustained during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives to achieve is to give you an understanding of what happens after you file for 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 provide a lot of details relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior permission from your bankruptcy Trustee, and in many cases will increase the length of your undischarged bankruptcy to at least five years instead of three.
You Will Be Offered Credit Instantly
One thing that surprises plenty of discharged bankrupts is that they will immediately be offered credit by a vast array of loan providers. The reason behind this is that you won’t have the capacity to declare 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. In some cases, obtaining a loan and making timely repayments will help strengthen your credit score, which will assist you in the recovery process. But be warned, you don’t want to take every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again instantly. The trick is to rebuild your credit history slowly.
Buying A Home Is Certainly Possible
There’s a popular misconception that when you declare bankruptcy, you will no longer have the chance to attain credit for a mortgage. This is certainly not the case. Though bankruptcy will leave you with a poor credit record, you can still buy a home if you manage to rebuild your credit within a few years, you pay all your bills in a timely manner, and you exhibit a responsible use of credit. Naturally, you won’t have the capacity to acquire a mortgage straight after you’re discharged, so it’s necessary to build your credit score carefully before even contemplating securing a home loan.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should take a look at their credit report at least twice a year. After initially declaring bankruptcy though, it’s paramount that you examine your credit report each month for at least the first six months into your bankruptcy. Some creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to prevent any further difficulties, it’s important that you keep an eye on your credit report to ensure it’s correct and up to date.
Whilst bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently limited. There are some serious financial limitations imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re completely capable of securing a bright financial future. Attaining home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Therefore, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to have to be taken into consideration to ensure a smooth recovery process. If you’re thinking of filing for bankruptcy, talk with Bankruptcy Experts Cassowary Coast on 1300 795 575 or visit their website for more information: www.bankruptcyexpertscassowarycoast.com.au