June 16, 2017 0

What Happens After You Declare Bankruptcy

Posted by:Charles Bosse onJune 16, 2017

Declaring Bankruptcy,Bankruptcy Advice,Bankruptcy Adelaide

Bankruptcy is not a decision that should be taken lightly. There are some major financial implications involved and your financial freedom will be constrained for many years to come. This doesn’t indicate that declaring 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 people declare bankruptcy every year and most of them have the ability to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will most definitely give you insight into making better financial decisions in the future.

Essentially, once you have filed for bankruptcy, you forfeit control of your finances and assets to a Trustee in exchange for protection against potential lawsuits that might be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which signifies that the financial restraints you incurred during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.

You Can’t Leave The Country Without Permission

One of the restraints of declaring bankruptcy is that you can’t exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to provide a lot of information relating to 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 Right Away

One thing that surprises plenty of discharged bankrupts is that they will immediately be offered credit by a large range of loan providers. The explanation behind this is that you won’t be able to declare bankruptcy again for an extended period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. Sometimes, acquiring a loan and making timely repayments will help strengthen your credit score, which will aid you in the recovery process. But be cautious, you don’t want to take 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 immediately. The trick is to rebuild your credit rating steadily.

Buying A Home Is Certainly Possible

There’s a standard misconception that whenever you declare bankruptcy, you will no longer be able to attain credit for a home loan. This is certainly not the case. While bankruptcy will leave you with a poor credit rating, you can still buy a home if you manage to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Needless to say, you won’t have the capacity to acquire a home loan straight after you’re discharged, so it’s very important to build your credit record carefully before even contemplating securing a mortgage.

Check Your Credit Frequently

Most financial experts recommend that discharged bankrupts should review their credit report about twice a year. After initially filing for bankruptcy though, it’s essential that you inspect your credit report monthly for at least the first six months into your bankruptcy. A number of creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to minimise any further complications, it’s paramount that you keep an eye on your credit report to make sure it’s correct and up to date.

Although bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently limited. There are some serious financial restrictions imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Acquiring a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and executed. For this reason, it’s essential that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to have to be taken into consideration to ensure a smooth recovery process. If you’re thinking about filing for bankruptcy, reach out to Fresh Start Solutions Adelaide on 1300 818 575 or visit their website for more details: http://freshstartsolutions.com.au/bankruptcy-adelaide

 

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