How you can Recover After Declaring Bankruptcy

There’s no doubt that are some significant financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some substantial changes. If you’re in this predicament, don’t be alarmed. The tough economic times experienced today means that more and more individuals are declaring bankruptcy. Actually, there are as much as 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 essential 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 adjustments have to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after filing for bankruptcy.

 

Emotional recovery

 

It’s normal for those who file for bankruptcy to experience emotions of failure, self-loathing and regret. While it may seem natural have these thoughts, 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 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. Facing your financial issues is the first step in overcoming them, so you’re certainly in a better position than you were prior to declaring bankruptcy.

 

Self-Evaluation

 

It’s critical that you evaluate the reasons why you became bankrupt to ensure 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. Though there’s probably a range 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 mistakes again.

 

Make a budget

 

Once you’ve recuperated emotionally from bankruptcy, the next step is to create a rational and attainable budget. You’ll have to look at your earnings and expenses thoroughly, 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 sacrifice some luxury items, becoming financially stable is your primary priority. There are some practical ways to save money, for instance eating at home rather than dining in restaurants and revoking your gym membership in favour of walking to work. Always remember to include in your budget an amount for unforeseen expenses.

 

Pay your bills on time

 

The first step in restoring your bad credit rating is to make sure that you pay all your bills on time. Even though this won’t boost your credit rating immediately, it will ensure that your credit rating doesn’t drop any further. You might prefer to set up 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 considered 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 strengthen your credit rating but it will allow you to increase your liquid assets, presenting you with more choices. If you’re in a situation where you can get a weekend job, you should genuinely consider it. Or take a look at your interests and try to discover a way to increase your income by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is an excellent idea.

 

Though filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial issues and learning from the past so you can enjoy financial freedom in the future. It’s important that you review the reasons that brought about your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will increase your credit rating eventually, and following a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, get in touch with Bankruptcy Experts Sydney today on 1300 795 575 or visit www.bankruptcyexpertssydney.com.au