Effective ways to Recover After Filing for Bankruptcy
There’s no doubt that are some serious financial consequences in declaring 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 difficult economic times experienced today means that a growing number of individuals are filing for bankruptcy. In fact, there are close to 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s important that you look towards the future and aim to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some alterations will need 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 declaring bankruptcy.
It’s normal for those who declare bankruptcy to experience emotions of failure, self-loathing and regret. Although it may seem natural have these feelings, being bankrupt is the result of just another mistake that we all make as humans. You have 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 easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Addressing 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 necessary that you look at the reasons why you became bankrupt to make sure 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. While there’s possibly a variety of reasons why you declared bankruptcy, most of them probably pertain to poor 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 devote yourself to not making these oversights again.
Make a budget
Once you’ve recovered emotionally from bankruptcy, the next step is to put together a practical and attainable budget. You’ll need to review 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 relinquish some luxury items, becoming financially responsible is your main priority. There are some simple ways to save money, such as eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Don’t forget 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 make sure you pay all your bills on time. Though this won’t improve your credit rating instantly, it will ensure that your rating doesn’t go down any further. You might choose to create automatic bill payments with your bank to ensure 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 presently got consistent employment, now is the time to do so. Consistent income over time will not only strengthen your credit rating but it will enable you to increase your liquid assets, presenting you with more choices. If you’re in a position where you can acquire a weekend job, you should genuinely consider it. Or take a look at your interests and attempt to create 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 wonderful idea.
Even though filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s essential that you reflect on the reasons that created your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating eventually, and sticking to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Joondalup today on 1300 795 575 or visit www.bankruptcyexpertsjoondalup.com.au