Effective ways to Recover After Filing for Bankruptcy
There’s no doubt that are some serious financial repercussions in filing for bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this predicament, don’t be alarmed. The tough economic times witnessed today means that an increasing number of people are declaring bankruptcy. Actually, there are close to 20,000 Australians every year that file for bankruptcy. So rest assured, you’re not alone.
As opposed to dwelling on the past, it’s imperative 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 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.
It’s usual for people who declare bankruptcy to feel emotions of failure, self-loathing and remorse. Although it may seem natural have these feelings, being bankrupt is the result of simply another mistake that all of us 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 easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Addressing your financial problems is the first step in overcoming them, so you’re already in a better position than you were before filing for bankruptcy.
It’s imperative that you explore the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Whilst there’s possibly a range of reasons why you filed for bankruptcy, most of them probably relate to bad spending and borrowing habits. So it’s a good idea to create a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.
Create a budget
Once you’ve recovered emotionally from bankruptcy, the next step is to put together a rational and achievable budget. You’ll need to look at your earnings and expenses carefully, and work out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or forego some luxury items, becoming financially responsible is your primary priority. There are some practical ways to save money, for instance eating at home instead of eating out and cancelling your gym membership in favour of walking to work. Don’t forget to include in your budget an amount for unanticipated expenses.
Pay your bills on time
The very first step in mending your bad credit rating is to ensure that you pay all your bills on time. Whilst this won’t boost your credit rating straight away, it will ensure that your credit rating doesn’t go down any further. You might choose to set up 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 as 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 permit you to increase your liquid assets, providing you with more possibilities. If you’re in a situation where you can obtain a weekend job, you should genuinely consider it. Or take a look at your interests and attempt to develop a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your income is a terrific idea.
Though filing for bankruptcy is never an easy decision, it is the very first step in confronting your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s essential that you reflect on the reasons that triggered your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Newcastle today on 1300 795 575 or visit www.bankruptcyexpertsnewcastle.com.au