May 24, 2017 0

How you can Recover After Filing for Bankruptcy

Posted by:Charles Bosse onMay 24, 2017

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 position, don’t be alarmed. The challenging economic times observed today means that a growing number of individuals are filing for 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 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 alterations will need to be made to secure a bright future for you and your family. So here are a couple 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 feel feelings of failure, self-loathing and remorse. Whilst it may seem natural have these emotions, being bankrupt is the result of simply another mistake that we all make as humans. You have to stop punishing yourself and look towards the future. Bankruptcy is the initial 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 troubles is the first step in overcoming them, so you’re certainly in a better position than you were before 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 gives you a second chance to get your finances in shape, so it’s best you make the most of it. Although there’s probably a number of reasons why you filed for bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a good idea to produce a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.

Make a budget

After you’ve rebounded emotionally from bankruptcy, the next step is to put together a realistic and manageable budget. You’ll want to consider your earnings and expenses carefully, 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 relinquish some luxury items, becoming financially healthy is your leading priority. There are some practical ways to save money, for example eating at home instead of 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 first step in repairing your bad credit rating is to ensure 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 want to create automatic bill payments through your bank to ensure that you don’t overlook 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 regarded as the single, most powerful action you can take to restore your credit rating.

Increase your income

If you haven’t currently got stable employment, now is the time to do so. Regular income over time will not only increase your credit rating but it will allow you to increase your liquid assets, providing you with more possibilities. If you’re in a situation where you can get a weekend job, you should genuinely consider it. Or have a look at your hobbies and aim to come up with 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 wonderful idea.

Though filing for bankruptcy is never an easy decision, it is the first step in dealing with your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s crucial that you evaluate the reasons that caused your financial hardships to ensure they don’t happen again. Steady employment and paying your bills on time will improve your credit rating eventually, and adhering to a budget is very important. If you’re considering declaring bankruptcy and need some advice on your options, get in touch with Fresh Start Solutions Hobart today on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-hobart

 

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