The best ways to Recover After Declaring Bankruptcy
There’s no doubt that are some serious financial consequences in filing for 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 an increasing number of individuals are filing for bankruptcy. In fact, there are about 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Instead of dwelling on the past, it’s crucial that you look towards the future and try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some adjustments 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 filing for bankruptcy.
It’s normal for those who file for bankruptcy to feel feelings of failure, self-loathing and regret. Even though it may seem natural have these feelings, being bankrupt is the result of simply another mistake that all of us make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the very first 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 already in a better position than you were before filing for bankruptcy.
It’s imperative that you examine the reasons why you became bankrupt to make sure that 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. Although there’s possibly a variety of reasons why you filed for bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a smart idea to make a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.
Create a budget
After you’ve recovered emotionally from bankruptcy, the next step is to create a practical and achievable budget. You’ll need to consider your earnings and expenses thoroughly, and formulate a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forfeit some luxury items, becoming financially stable is your primary priority. There are some simple ways to save money, such as eating at home instead of dining in restaurants and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unforeseen expenses.
Pay your bills on time
The initial step in mending your bad credit rating is to make sure you pay all your bills on time. Though this won’t increase your credit rating instantly, it will ensure that your rating doesn’t decrease any further. You might wish to create automatic bill payments through your bank to guarantee 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 powerful action you can take to restore your credit rating.
Increase your income
If you haven’t presently got stable employment, now is the time to do so. Consistent income over time will not only strengthen your credit rating but it will permit you to increase your liquid assets, presenting you with more options. If you’re in a position where you can get a weekend job, you should really consider it. Or take a look at your hobbies and attempt to create a way to increase your earnings by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a wonderful idea.
Although filing for 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 assess the reasons that caused your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating gradually, and adhering to a budget is paramount. If you’re considering declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Wollongong today on 1300 795 575 or visit www.bankruptcyexpertswollongong.com.au