|June 16, 2017||0|
Bankruptcy is not a decision that should be taken lightly. There are some serious financial implications involved and your financial freedom will be confined for many years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should really be thought of as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy each year and many of them have the capacity to buy homes, cars and acquire credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will definitely give you insight into making better financial decisions in the future.
In essence, once you have declared bankruptcy, you forfeit control of your finances and assets to a Trustee in exchange for protection against litigation that may be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which indicates that the financial limitations 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 tries 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 restraints of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to supply a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel abroad without prior permission from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to at least five years instead of three.
You Will Be Offered Credit Instantly
One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a vast array of creditors. The reason behind this is that you won’t have the capacity to declare bankruptcy again for a long period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. Sometimes, obtaining a loan and making timely repayments will help improve your credit history, which will help you in the recovery process. But be warned, you don’t want to accept every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again immediately. The trick is to rebuild your credit record steadily.
Buying A Home Is Definitely Possible
There’s a frequent misconception that after you declare bankruptcy, you will no longer have the opportunity to obtain credit for a home loan. This is certainly not the case. Whilst bankruptcy will leave you with a bad credit score, you can still buy a home if you’re able 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. Naturally, you won’t have the ability to obtain a mortgage straight after you’re discharged, so it’s key to build your credit record sensibly before even thinking about securing a home loan.
Check Your Credit On A Regular Basis
Most financial experts recommend that discharged bankrupts should inspect their credit report around twice a year. After initially filing for bankruptcy though, it’s imperative that you examine your credit report monthly for at least the first six months into your bankruptcy. Several creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to prevent any further complications, it’s paramount that you keep track of your credit report to make sure it’s accurate and up to date.
Whilst bankruptcy isn’t the ideal position to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial limitations imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re completely capable of securing a bright financial future. Acquiring home loans and other credit lines will be possible a few years after discharge if the recovery process is well-planned and executed. Hence, it’s crucial that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to must be considered to ensure a smooth recovery process. If you’re considering filing for bankruptcy, phone Fresh Start Solutions Sydney on 1300 818 575 or visit their website for more information: http://freshstartsolutions.com.au/bankruptcy-sydney