|June 16, 2017||Comments Closed|
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 many years to come. This doesn’t indicate that declaring bankruptcy is the end of the world though. It should actually be thought of as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy each year and many of them have the capacity to buy homes, cars and attain credit cards after they’re discharged. Further to this, understanding what life is like after you have declared bankruptcy will evidently 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 legal action that may be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which indicates that the financial constraints you sustained during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article intends to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the restraints of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to supply 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 consent from your bankruptcy Trustee, and in many cases will increase the length of your undischarged bankruptcy to at least five years rather than three.
You Will Be Offered Credit Instantly
One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a wide variety of financial institutions. The reason behind this is that you won’t have the ability to declare bankruptcy again for a lengthy period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In some cases, acquiring a loan and making timely repayments will help improve your credit score, which will help you in the recovery process. But be cautious, you don’t want to accept every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again straight away. The trick is to rebuild your credit history slowly.
Buying A Home Is Definitely Possible
There’s a frequent misconception that when you declare bankruptcy, you will no longer have the ability to secure credit for a mortgage. This is definitely not the case. Even though bankruptcy will leave you with a poor credit rating, you can still purchase a home if you have the capacity to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you display a responsible use of credit. Needless to say, you won’t have the capacity to obtain a mortgage straight after you’re discharged, so it’s key to build your credit record carefully before even considering securing a home loan.
Check Your Credit Frequently
Most financial specialists advise that discharged bankrupts should inspect their credit report at the very least twice a year. After initially declaring bankruptcy though, it’s imperative that you review your credit report each month for at least the first six months into your bankruptcy. A few creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to minimise any further complications, it’s necessary that you monitor your credit report to make sure that it’s accurate and up to date.
While bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial restrictions imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re perfectly capable of securing a bright financial future. Acquiring home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and executed. Thus, it’s important that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is very complicated and there are many factors to must be considered to ensure a smooth recovery process. If you’re thinking of declaring bankruptcy, phone Bankruptcy Experts Bendigo on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsbendigo.com.au