There’s no doubt that are some heavy financial consequences in declaring bankruptcy, and there’s no question that your life will go through some substantial changes. If you’re in this predicament, don’t be alarmed. The difficult economic times witnessed today means that more and more people are filing for bankruptcy. In reality, there are around 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s critical 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 alterations 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 filing for bankruptcy.
It’s normal for individuals who file for bankruptcy to experience emotions of failure, self-loathing and remorse. While it may seem natural have these thoughts, being bankrupt is the result of merely another mistake that we all make as humans. You have 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 much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Addressing your financial difficulties is the first step in overcoming them, so you’re actually in a better position than you were prior to filing for bankruptcy.
It’s imperative that you examine the reasons why you became bankrupt to make certain that 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. Even though there’s probably a variety of reasons why you declared bankruptcy, most 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 commit yourself to not making these oversights again.
Make a budget
After you’ve recouped emotionally from bankruptcy, the next step is to put together a practical and achievable budget. You’ll have to examine your earnings 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 sacrifice some luxury items, becoming financially healthy is your foremost priority. There are some practical ways to save money, such as eating at home instead of eating out and revoking 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 first step in restoring your bad credit rating is to make sure you pay all your bills on time. Even though this won’t improve your credit rating straight away, it will ensure that your credit rating doesn’t decrease any further. You might choose to set up automatic bill payments with your bank to guarantee 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 thought to be the single, most powerful action you can take to restore your credit rating.
Increase your income
If you haven’t currently got stable employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will permit you to increase your liquid assets, presenting you with more possibilities. If you’re in a position where you can acquire a weekend job, you should really consider it. Or have a look at your interests and aim 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 great idea.
Even though declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you assess the reasons that led to your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating gradually, and sticking to a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Cassowary Coast today on 1300 795 575 or visit www.bankruptcyexpertscassowarycoast.com.au