There’s no doubt that are some serious financial repercussions in filing for bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this predicament, don’t be alarmed. The challenging economic times observed today means that more and more people are filing for bankruptcy. As a matter of fact, there are about 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s essential 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 adjustments have to be made to secure a bright future for you and your family. So here are a few simple strategies that you can use to best recover after declaring bankruptcy.
It’s usual for individuals who file for bankruptcy to feel feelings of failure, self-loathing and remorse. Even though it may seem natural have these feelings, becoming bankrupt is the result of merely another mistake that all of us make as humans. You should stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is much easier than you think. The longer you give in to these negative feelings, the longer it will take to recover. Addressing your financial difficulties is the first step in overcoming them, so you’re certainly in a better position than you were prior to declaring bankruptcy.
It’s crucial that you explore the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Even though there’s possibly a variety of reasons why you filed for bankruptcy, all of them probably pertain to bad spending and borrowing habits. So it’s a smart idea to create a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these mistakes again.
Make a budget
After you’ve rebounded emotionally from bankruptcy, the next step is to put together a realistic and achievable budget. You’ll have to inspect your income and expenses closely, 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 do away with some luxury items, becoming financially responsible is your leading priority. There are some practical ways to save money, for example eating at home as an alternative to eating in restaurants and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The very first step in mending your bad credit rating is to ensure you pay all your bills on time. Even though this won’t increase your credit rating instantly, it will ensure that your rating doesn’t decrease any further. You might want to set up automatic bill payments through your bank to ensure 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 presently got consistent employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will enable you to increase your liquid assets, presenting you with more possibilities. If you’re in a position where you can obtain a weekend job, you should really consider it. Or take a look at your interests and try to develop 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 an excellent idea.
Though filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s critical that you evaluate the reasons that brought about your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating eventually, and sticking to a budget is very important. If you’re thinking about declaring bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Alice Springs today on 1300 795 575 or visit www.bankruptcyexpertsalicesprings.com.au