Bankruptcy is not a decision that should be taken lightly. There are some major financial consequences involved and your financial freedom will be limited for several years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should really be thought of as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy every year and most of them are able to buy homes, cars and acquire credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will clearly give you insight into making better financial decisions in the future.
In essence, once you have filed for bankruptcy, you surrender control of your finances and assets to a Trustee in exchange for protection against litigation that might be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which indicates that the financial stipulations you suffered during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the restrictions of declaring bankruptcy is that you cannot exit the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll need to provide a lot of details relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel internationally without prior permission from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years rather than three.
You Will Be Offered Credit Right Away
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a wide variety of financial institutions. The main reason behind this is that you won’t have the ability to declare bankruptcy again for a lengthy period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Sometimes, acquiring a loan and making timely repayments will help improve your credit rating, which will assist you in the recovery process. But be cautious, you don’t want to take every offer thrown in your direction as some creditors are very dubious and include hidden fees and charges that can put you in debt again straight away. The key is to rebuild your credit record progressively.
Buying A Home Is Definitely Possible
There’s a regular misconception that whenever you file for bankruptcy, you will no longer have the capacity to acquire credit for a mortgage. This is definitely not the case. Although bankruptcy will leave you with a poor credit score, you can still purchase a home if you have the ability to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Of course, you won’t have the capacity to obtain a home loan straight after you’re discharged, so it’s critical to build your credit score sensibly before even contemplating securing a mortgage.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should take a look at their credit report around twice a year. After initially filing for bankruptcy though, it’s essential that you review your credit report each month for at least the first 6 months into your bankruptcy. Several creditors may still be requesting payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to avoid any further complications, it’s necessary that you keep track of your credit report to ensure it’s correct and up to date.
Though bankruptcy isn’t the most ideal position to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial restrictions imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Attaining home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Consequently, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to should be taken into account to ensure a smooth recovery process. If you’re thinking about filing for bankruptcy, talk to Bankruptcy Experts Alice Springs on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsalicesprings.com.au