Effective ways to Recover After Filing for Bankruptcy
There’s no doubt that are some heavy financial consequences in declaring bankruptcy, and there’s no question that your life will experience some significant changes. If you’re in this predicament, don’t be alarmed. The tough economic times experienced today means that an increasing number of individuals are declaring bankruptcy. Actually, there are as much as 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s important 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 changes will need to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after filing for bankruptcy.
It’s common for those who declare bankruptcy to experience feelings of failure, self-loathing and regret. Whilst it may seem natural have these thoughts, becoming bankrupt is the result of simply another mistake that we all make as humans. You need to 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 give in to these negative feelings, the longer it will take to recover. Facing your financial troubles is the first step in overcoming them, so you’re already in a better position than you were prior to declaring bankruptcy.
It’s important that you look at the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Declaring bankruptcy gives you a second chance to get your finances in order, so it’s best you make the most of it. Even though there’s probably a number of reasons why you declared 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 filing for bankruptcy and commit yourself to not making these mistakes again.
Create a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to make a rational and conceivable budget. You’ll have to examine your income and expenses thoroughly, and figure out a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forego some luxury items, becoming financially stable is your leading priority. There are some practical ways to save money, for example eating at home as an alternative to dining in restaurants 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 initial step in repairing your bad credit rating is to make sure you pay all your bills on time. Although this won’t boost your credit rating straight away, it will ensure that your credit rating doesn’t decrease any further. You might wish to set up 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 considered the single, most powerful 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 allow you to increase your liquid assets, presenting you with more opportunities. If you’re in a position where you can obtain a weekend job, you should sincerely consider it. Or take a look at your interests and aim 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 income is a wonderful idea.
While declaring bankruptcy is never an easy decision, it is the first step in confronting your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you evaluate the reasons that resulted in your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Ipswich today on 1300 795 575 or visit www.bankruptcyexpertsipswich.com.au