June 16, 2017 0

What Happens After You File For Bankruptcy

Posted by:Charles Bosse onJune 16, 2017

 

Bankruptcy is not a decision that should be taken lightly. There are some taxing financial repercussions involved and your financial freedom will be confined for several years to come. This doesn’t indicate that filing for bankruptcy is the end of the world though. It should actually be thought of as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy each year and most of them have the capacity to buy homes, cars and obtain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will not surprisingly give you insight into making better financial decisions in the future.

In simple terms, once you have declared bankruptcy, you hand over 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 completed, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which signifies that the financial restrictions you sustained during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article intends to achieve is to give you an understanding of what happens after you file for bankruptcy and what options you’ll have after you become discharged.

You Can’t Leave The Country Without Permission

One of the drawbacks of declaring bankruptcy is that you can’t exit the country while you’re undischarged only if you seek permission from your Trustee. To do this, you’ll need to supply a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country without prior consent from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to a minimum of five years instead of three.

You Will Be Offered Credit Right Away

One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a variety of lending institutions. The main reason behind this is that you won’t have the ability to file for 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 improve your credit history, which will help you in the recovery process. But be careful, you don’t want to accept every offer thrown in your direction as some lending institutions are very dubious and include hidden fees and charges that can put you in debt again straight away. The trick is to rebuild your credit history steadily.

Buying A Home Is Certainly Possible

There’s a regular misconception that once you file for bankruptcy, you will no longer have the chance to acquire credit for a mortgage. This is definitely not the case. While bankruptcy will leave you with a bad credit rating, you can still purchase a home if you manage to rebuild your credit within a few years, you pay all your bills in a timely manner, and you display a responsible use of credit. Naturally, you won’t have the ability to get a home loan straight after you’re discharged, so it’s critical to build your credit rating intelligently before even envisioning securing a home loan.

Check Your Credit On A Regular Basis

Most financial experts recommend that discharged bankrupts should take a look at their credit report at the very least twice a year. After initially filing for bankruptcy though, it’s imperative that you inspect your credit report each month for at least the first 6 months into your bankruptcy. Various creditors may still be demanding payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to stay clear of any further complications, it’s important that you keep an eye on your credit report to ensure it’s correct and up to date.

Even though bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restrictions imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Obtaining a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Hence, it’s crucial that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to should be taken into account to ensure a smooth recovery process. If you’re considering declaring bankruptcy, speak with Fresh Start Solutions Hobart on 1300 818 575 or visit their website for more details: http://freshstartsolutions.com.au/bankruptcy-hobart

 

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