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How You Can Recover After Declaring Bankruptcy 1

How you can Recover After Filing for Bankruptcy

There’s no doubt that are some considerable financial consequences in filing for bankruptcy, and there’s no question that your life will encounter some significant changes. If you’re in this scenario, don’t be alarmed. The tough economic times observed today means that more and more individuals are filing for bankruptcy. Actually, there are around 20,000 Australians each year that file for 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 changes 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.

 

Emotional recovery

 

It’s normal for individuals who file for bankruptcy to feel emotions of failure, self-loathing and remorse. Though it may seem natural have these emotions, becoming bankrupt is the result of simply 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 much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Facing your financial troubles is the first step in overcoming them, so you’re actually in a better position than you were before declaring bankruptcy.

 

Self-Evaluation

 

It’s very important that you review the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Although there’s probably a variety of reasons why you filed for bankruptcy, all of them probably pertain to poor spending and borrowing habits. So it’s a good idea to make a list of two or three things that led you to filing for bankruptcy and commit yourself to not making these mistakes again.

 

Create a budget

 

Once you’ve recouped emotionally from bankruptcy, the next step is to create a rational and conceivable budget. You’ll want to review your income and expenses carefully, 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 forfeit some luxury items, becoming financially healthy is your primary priority. There are some simple ways to save money, for example eating at home instead of eating 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 1st step in repairing your bad credit rating is to make sure that you pay all your bills on time. Although this won’t increase your credit rating instantly, it will ensure that your rating doesn’t decrease any further. You might prefer to set up automatic bill payments through 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 thought to be the single, most powerful action you can take to restore your credit rating.

 

Increase your income

 

If you haven’t already got steady 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, providing you with more options. If you’re in a position where you can obtain a weekend job, you should genuinely consider it. Or have a look at your hobbies and try to come up with a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is an excellent idea.

 

Although declaring bankruptcy is never an easy decision, it is the first step in addressing your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s critical that you evaluate the reasons that triggered your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating gradually, and following a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Canberra today on 1300 795 575 or visit www.bankruptcyexpertscanberra.com.au