|May 24, 2017||Comments Closed|
There’s no doubt that are some considerable financial consequences in declaring bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this position, don’t be alarmed. The difficult economic times experienced today means that an increasing number of individuals are filing for bankruptcy. In reality, there are around 20,000 Australians every year that declare 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 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 declaring bankruptcy.
It’s normal for individuals who declare bankruptcy to feel emotions of failure, self-loathing and remorse. Even though it may seem natural have these feelings, becoming 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 very first 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. Confronting your financial problems is the first step in overcoming them, so you’re actually in a better position than you were before declaring bankruptcy.
It’s imperative that you review 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 order, so it’s best you make the most of it. Even though there’s probably a number of reasons why you filed for bankruptcy, all of them probably pertain to poor spending and borrowing habits. So it’s a smart idea to produce a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these errors again.
Make a budget
Once you’ve bounced back emotionally from bankruptcy, the next step is to put together a practical and manageable budget. You’ll need to evaluate your earnings and expenses closely, and develop 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 healthy is your leading priority. There are some practical ways to save money, for instance 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 unexpected expenses.
Pay your bills on time
The first step in restoring your bad credit rating is to ensure you pay all your bills on time. Whilst this won’t increase your credit rating straight away, it will ensure that your rating doesn’t go down any further. You might prefer to create automatic bill payments with your bank to guarantee 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 considered the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got consistent employment, now is the time to do so. Consistent income over time will not only increase 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 obtain a weekend job, you should seriously consider it. Or have a look at your hobbies and aim to come up with 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.
Though 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 vital that you evaluate the reasons that caused your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating eventually, and adhering to a budget is very important. If you’re considering filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Bendigo today on 1300 795 575 or visit www.bankruptcyexpertsBendigo.com.au