How to Recover After Filing for Bankruptcy

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How to Recover After Filing for Bankruptcy

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There’s no doubt that are some heavy 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 difficult economic times experienced today means that more and more individuals are declaring bankruptcy. In fact, there are approximately 20,000 Australians every year that declare bankruptcy. So rest assured, you’re not alone.

Rather than dwelling on the past, it’s critical 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 improvements will need to be made to secure a bright future for you and your family. So here are a few simple strategies that you can use to best recover after filing for bankruptcy.

Psychological recovery

It’s typical for people who file for bankruptcy to experience emotions of failure, self-loathing and regret. Whilst it may seem natural have these emotions, becoming bankrupt is the result of simply another mistake that we all make as humans. You should 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 less complicated than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Facing your financial difficulties is the first step in overcoming them, so you’re certainly in a better position than you were prior to filing for bankruptcy.

Self-Evaluation

It’s paramount that you take a look at the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Declaring bankruptcy offers you a second chance to get your finances in shape, so it’s best you make the most of it. While there’s possibly a number of reasons why you filed for bankruptcy, most of them probably relate to bad 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 commit yourself to not making these errors again.

Create a budget

After you’ve rebounded emotionally from bankruptcy, the next step is to put together a practical and manageable budget. You’ll have to review your income and expenses carefully, and formulate 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 foremost priority. There are some practical ways to save money, for example eating at home as an alternative to eating in restaurants and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unforeseen expenses.

Pay your bills on time

The very first step in repairing your bad credit rating is to make sure you pay all your bills on time. Whilst this won’t boost your credit rating straight away, it will ensure that your rating doesn’t decrease any further. You might prefer to create automatic bill payments through your bank to ensure 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 presently got steady employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will allow you to increase your liquid assets, presenting you with more opportunities. If you’re in a situation where you can acquire a weekend job, you should really consider it. Or have a look at your interests and aim 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 an excellent idea.

Even though filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s necessary that you assess the reasons that created your financial hardships to ensure they don’t happen again. Stable employment and paying your bills on time will increase your credit rating gradually, and sticking to a budget is paramount. If you’re considering declaring bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Kalgoorlie today on 1300 795 575 or visit www.bankruptcyexpertskalgoorlie.com.au

By | 2020-08-17T01:01:38+00:00 May 30th, 2017|Article, bankruptcy, blog|0 Comments

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