There’s no question that bankruptcy isn’t the best scenario to be experiencing. There are some harsh financial consequences involved and it’s a very intricate and stressful process that will affect you financially for several years to come. Ending up in mountains of debt can transpire very quickly, and lots of individuals end up in this situation because of a variety of factors. Not being able to work due to illness is one of the most frequent reasons people file for bankruptcy. It’s not like they had any control over the situation, but being unable to repay their debts considering that they have no income is the hard reality they have to face. Actually, 7,900 people in Australia filed for bankruptcy in the March 2017 quarter1, so it’s not as rare as some people may believe. In my opinion, bankruptcy is neither good nor bad. Yes, those who file for bankruptcy have made some poor financial decisions and will reprimanded as necessary, however declaring bankruptcy is also the first step to financial freedom. Many individuals struggle for years just to make ends meet, even though their debts keep worsening, so in a lot of cases, bankruptcy is a chance for a fresh start for individuals that are unable to repay their debts.
Even though I’ve never been bankrupt personally, I’ve witnessed the journey of many individuals who have and surprisingly, many people are better off and glad they went through the process. If you’re grappling with financial hardship and contemplating bankruptcy, this blog will detail what life is like after you declare bankruptcy.
You Will Not Be Completely Debt Free By Declaring Bankruptcy
Bankruptcy is relatively complicated, and there is a standard misconception that all debts are cleared by declaring bankruptcy. This is certainly not the case. There are several debts that won’t be eliminated, including Centrelink debts, HECS debts, child support, court imposed fines (such as speeding tickets), and also money that is owed to an insurance provider resulting from a car accident where you were uninsured and in the wrong. But, declaring bankruptcy will remove debts such as credit cards, GST and tax, and unsecured personal loans. The fact is, you will still have debts to pay after you declare bankruptcy, but the most serious debts in most cases, such as credit cards, will be cleared.
Feelings Of Remorse And Embarrassment Are Natural
Bankruptcy is a taxing process and many people who declare bankruptcy have feelings of guilt and embarrassment; as if they’ve lost in life. This is quite natural, however it’s crucial to overcome these emotions because the reality is, humans make mistakes, and bankruptcy is a way that you can go back to square one financially and get your life back on the right track. The sooner you recover from these feelings of humiliation, the sooner you’ll be able to begin the recovery process and create a plan of how you’re going to repay your remaining debts and rebuild your credit report. Remember, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit report, so it’s definitely not the end of the world.
You Can’t Borrow Any Money For Three Years
Unfortunately, by filing for bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s crucial that you start rebuilding your credit report by maintaining a consistent income and paying your bills and outstanding debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the option to obtain loans for secured assets like houses and cars, but your interest rates will be much higher as a result of your bad credit rating. Even though it’s not always a good idea to secure loans straight away, it is possible. After seven years from the time you became bankrupt, your credit report will be clean, and you will have the chance to secure all kinds of loans again at competitive rates.
Life after declaring bankruptcy surely isn’t easy, but the emotional relief that many individuals experience after beginning the process definitely softens the blow. There are some major financial implications involved, but filing for bankruptcy is the first step towards financial freedom and securing a bright future for you and your family. If you’re enduring financial difficulties, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep battling financially for years because you’re afraid of the stigma linked with bankruptcy. It’s not easy, but it’s also not the end of the world. If you ‘d like to talk to someone about your financial condition, get in contact with Bankruptcy Experts Townsville on 1300 795 575 for a confidential discussion, or alternatively visit their website for more details: http://www.bankruptcyexpertstownsville.com.au