May 24, 2017 0

How you can Recover After Declaring Bankruptcy

Posted by:Charles Bosse onMay 24, 2017

Declaring Bankruptcy,Bankruptcy Advice,Bankruptcy Adelaide

There’s no doubt that are some heavy financial repercussions in declaring bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this position, don’t be alarmed. The tough economic times witnessed today means that more and more individuals are filing for bankruptcy. In reality, there are roughly 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.

Rather than dwelling on the past, it’s essential that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some alterations will need to be made to secure a bright future for you and your family. So here are some simple strategies that you can use to best recover after declaring bankruptcy.

Psychological recovery

It’s common for those who file for bankruptcy to feel feelings of failure, self-loathing and remorse. Though it may seem natural have these feelings, becoming bankrupt is the result of just 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 much easier than you think. The longer you surrender to these negative feelings, the longer it will take to recover. Addressing your financial troubles 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 crucial that you review the reasons why you became bankrupt to make certain that you don’t make the same mistakes again. Filing for bankruptcy gives 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 pertain 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 devote yourself to not making these oversights again.

Make a budget

Once you’ve rebounded emotionally from bankruptcy, the next step is to develop a rational and manageable budget. You’ll need to assess your income and expenses carefully, and formulate 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 foremost priority. There are some simple ways to save money, for instance eating at home instead of eating in restaurants and cancelling your gym membership in favour of walking to work. Always remember to include in your budget an amount for unanticipated expenses.

Pay your bills on time

The 1st step in restoring your bad credit rating is to make sure that you pay all your bills on time. Whilst this won’t increase your credit rating straight away, it will ensure that your rating doesn’t decrease any further. You might want 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 effective action you can take to restore your credit rating.

Increase your income

If you haven’t currently got steady employment, now is the time to do so. Regular income over time will not only improve your credit rating but it will allow you to increase your liquid assets, providing you with more options. If you’re in a position where you can get a weekend job, you should genuinely consider it. Or have a look at your hobbies and aim to discover a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your earnings is a terrific idea.

Although declaring bankruptcy is never an easy decision, it is the very first step in dealing with your financial problems and learning from the past so you can enjoy financial freedom in the future. It’s critical that you evaluate the reasons that led to your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating progressively, and following a budget is paramount. If you’re thinking about filing for bankruptcy and need some advice on your options, contact Fresh Start Solutions today on 1300 818 575 or visit http://freshstartsolutions.com.au

 

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