There’s no doubt that are some tough financial consequences in filing for bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this situation, don’t be alarmed. The challenging economic times witnessed today means that a growing number of individuals are declaring bankruptcy. In fact, there are roughly 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s vital 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 modifications have to be made to secure a bright future for you and your family. So here are a couple of simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for individuals who declare bankruptcy to experience emotions of failure, self-loathing and regret. Whilst it may seem natural have these thoughts, becoming 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 surrender to these negative feelings, the longer it will take to recover. Dealing with your financial troubles is the first step in overcoming them, so you’re certainly in a better position than you were prior to filing for bankruptcy.
It’s paramount that you take a look at the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. While there’s probably a range of reasons why you filed for bankruptcy, all of them probably pertain 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 declaring bankruptcy and commit yourself to not making these mistakes again.
Make a budget
After you’ve recouped emotionally from bankruptcy, the next step is to make a rational and conceivable budget. You’ll have to assess your income 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 key priority. There are some simple ways to save money, such as eating at home rather than dining in restaurants and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The first step in mending your bad credit rating is to ensure you pay all your bills on time. Even though this won’t improve your credit rating immediately, it will ensure that your credit rating doesn’t drop any further. You might choose to create automatic bill payments through 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 already got consistent employment, now is the time to do so. Consistent income over time will not only improve your credit rating but it will allow you to increase your liquid assets, presenting you with more opportunities. If you’re in a situation where you can obtain a weekend job, you should seriously consider it. Or take a look at your interests and aim to come up with a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a great idea.
Although declaring bankruptcy is never an easy decision, it is the first step in addressing your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that caused your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Northern Rivers today on 1300 795 575 or visit www.bankruptcyexpertsnorthernrivers.com.au