Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial repercussions involved and your financial freedom will be confined for years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should actually be thought of as the first step in securing a bright financial future for you and your family. Millions of individuals file for bankruptcy each year and the majority of them have the ability to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will definitely give you insight into making better financial decisions in the future.
Ultimately, once you have declared bankruptcy, you hand over control of your finances and assets to a Trustee in exchange for protection against litigation that could be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which indicates that the financial constraints you suffered during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aims 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 limitations of declaring bankruptcy is that you cannot leave the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to supply a lot of information regarding 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 a minimum of five years instead of three.
You Will Be Offered Credit Right Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large range of loan providers. The reason behind this is that you won’t have the capacity to file for bankruptcy again for a long period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In certain situations, securing a loan and making timely repayments will help improve your credit history, which will help you in the recovery process. But be cautious, you don’t want to accept 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 straight away. The key is to rebuild your credit score gradually.
Buying A Home Is Certainly Possible
There’s a regular misconception that when you file for bankruptcy, you will no longer have the ability to secure credit for a home loan. This is definitely not the case. Although bankruptcy will leave you with a poor credit score, you can still buy a home if you have the capacity 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. Needless to say, you won’t be able to obtain a mortgage straight after you’re discharged, so it’s vital to build your credit history sensibly before even envisioning securing a home loan.
Check Your Credit On A Regular Basis
Most financial experts recommend that discharged bankrupts should check their credit report about twice a year. After initially declaring bankruptcy though, it’s important that you look at your credit report monthly for at least the first 6 months into your bankruptcy. Various creditors may still be demanding payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to steer clear of any further complications, it’s vital that you keep an eye on your credit report to make sure that it’s accurate and up to date.
Even though bankruptcy isn’t the preferred position to be in, it doesn’t mean that your financial future is permanently restrained. There are some serious financial restrictions imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, 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 executed. Hence, it’s crucial that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to need to be considered to ensure a smooth recovery process. If you’re considering filing for bankruptcy, contact Bankruptcy Experts Townsville on 1300 795 575 or visit their website for more details: www.bankruptcyexpertstownsville.com.au