What Happens After You Declare Bankruptcy
Bankruptcy is not a decision that should be taken lightly. There are some heavy financial implications involved and your financial freedom will be restricted for many years to come. This doesn’t suggest that filing for bankruptcy is the end of the world though. It should really be considered as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy each year and the majority 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 filed for bankruptcy will evidently give you insight into making better financial decisions in the future.
Ultimately, once you have filed for bankruptcy, you hand over control of your finances and assets to a Trustee for protection against potential lawsuits that could 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 3 years) after which time you’ll become discharged, which means that the financial limitations you sustained during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article tries 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 drawbacks of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll need to provide a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel internationally without prior approval from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to at least five years as opposed to three.
You Will Be Offered Credit Instantly
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a large variety of loan providers. The explanation behind this is that you won’t have the capacity to file for bankruptcy again for an extensive 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, obtaining a loan and making timely repayments will help improve your credit history, which will help you in the recovery process. But be warned, you don’t want to accept 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 instantly. The trick 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 secure credit for a home loan. This is definitely not the case. 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 on time, and you exhibit a responsible use of credit. Naturally, you won’t have the ability to get a mortgage straight after you’re discharged, so it’s imperative to build your credit score sensibly before even thinking of securing a home loan.
Check Your Credit On A Regular Basis
Most financial experts advise that discharged bankrupts should examine their credit report around twice a year. After initially filing for bankruptcy though, it’s vital that you take a look at your credit report monthly for at least the first six 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 prevent any further difficulties, it’s paramount that you keep track of your credit report to make sure it’s correct and up to date.
Though bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently restrained. There are some serious financial restraints imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Obtaining 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. For this reason, it’s important that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to should be considered to ensure a smooth recovery process. If you’re thinking of declaring bankruptcy, phone Bankruptcy Experts Canberra on 1300 795 575 or visit their website for more details: www.bankruptcyexpertscanberra.com.au