May 24, 2017 0

Effective ways to Recover After Filing for Bankruptcy

Posted by:Charles Bosse onMay 24, 2017

Declaring Bankruptcy,Bankruptcy Sydney, Bankruptcy Advice

There’s no doubt that are some heavy financial consequences in declaring bankruptcy, and there’s no question that your life will go through some significant changes. If you’re in this situation, don’t be alarmed. The challenging economic times witnessed today means that more and more individuals are filing for bankruptcy. Actually, there are as much as 20,000 Australians each year that declare 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 try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some changes have 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 individuals who declare bankruptcy to experience emotions of failure, self-loathing and guilt. Although it may seem natural have these thoughts, being bankrupt is the result of just another mistake that we all 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 surrender to these negative feelings, the longer it will take to recover. Facing your financial problems is the first step in overcoming them, so you’re certainly in a better position than you were before filing for bankruptcy.

Self-Evaluation

It’s critical that you explore the reasons why you became bankrupt to make sure that 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. Even though there’s possibly a number of reasons why you filed for bankruptcy, most of them probably relate to poor spending and borrowing habits. So it’s a smart idea to create a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these oversights again.

Create a budget

After you’ve recovered emotionally from bankruptcy, the next step is to create a rational and attainable budget. You’ll need to evaluate your earnings and expenses closely, and figure out a way to save money while still paying all your living expenses. Even if it means that you downsize your house or relinquish some luxury items, becoming financially responsible is your main priority. There are some easy ways to save money, like eating at home instead of eating 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 very first step in restoring your bad credit rating is to make sure you pay all your bills on time. Though this won’t improve your credit rating instantly, it will ensure that your rating doesn’t decrease any further. You might choose 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 regarded as the single, most powerful 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. Consistent income over time will not only strengthen your credit rating but it will permit you to increase your liquid assets, providing you with more choices. If you’re in a situation where you can get a weekend job, you should sincerely consider it. Or take a look at your hobbies and try to come up with 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.

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

 

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