There’s no doubt that are some heavy financial consequences in declaring bankruptcy, and there’s no question that your life will encounter some considerable changes. If you’re in this situation, don’t be alarmed. The challenging economic times experienced today means that a growing number of people are filing for bankruptcy. Actually, there are around 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s essential that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some alterations 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 common for people who declare bankruptcy to experience feelings of failure, self-loathing and guilt. Even though it may seem natural have these emotions, being bankrupt is the result of just another mistake that all of us make as humans. You need 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 less complicated than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Addressing your financial troubles is the first step in overcoming them, so you’re already in a better position than you were before declaring bankruptcy.
It’s very important that you take a look at 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 order, so it’s best you make the most of it. Whilst there’s probably a number of reasons why you declared bankruptcy, all of them probably relate to poor spending and borrowing habits. So it’s a smart idea to produce 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
After you’ve recouped emotionally from bankruptcy, the next step is to create a rational and conceivable budget. You’ll need to assess your earnings and expenses thoroughly, and work out 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 key priority. There are some practical ways to save money, like eating at home as an alternative to eating out and cancelling your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to ensure that you pay all your bills on time. Although this won’t increase your credit rating instantly, it will ensure that your rating doesn’t go down any further. You might wish to create automatic bill payments through your bank to ensure that you don’t overlook 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 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 increase your credit rating but it will enable you to increase your liquid assets, presenting you with more opportunities. If you’re in a position where you can get a weekend job, you should really consider it. Or have a look at your hobbies and attempt to discover a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is an excellent idea.
Even though declaring bankruptcy is never an easy decision, it is the first step in confronting your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s vital that you evaluate the reasons that led to your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating gradually, and sticking to a budget is paramount. If you’re considering declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Townsville today on 1300 795 575 or visit www.bankruptcyexpertstownsville.com.au