June 16, 20170

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 unpleasant financial consequences involved and your financial freedom will be restricted for years to come. This doesn’t suggest 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 file for bankruptcy each year and a lot of them have the capacity to buy homes, cars and acquire credit cards after they’re discharged. In addition to this, understanding what life is like after you have filed for bankruptcy will certainly give you insight into making better financial decisions in the future.

Fundamentally, once you have declared bankruptcy, you give up 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 3 years) after which time you’ll become discharged, which means that the financial restraints you suffered during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aims 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 disadvantages of declaring bankruptcy is that you can’t leave 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 abroad without prior consent from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to at least five years rather than three.

You Will Be Offered Credit Right Away

One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a large variety of financial institutions. The main reason behind this is that you won’t have the ability to file for bankruptcy again for an extensive period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In some cases, obtaining a loan and making timely repayments will help strengthen your credit history, which will aid you in the recovery process. But be wary, you don’t want to accept every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again straight away. The key is to rebuild your credit score gradually.

Buying A Home Is Definitely Possible

There’s a general misconception that whenever you file for bankruptcy, you will no longer be able to attain credit for a mortgage. This is definitely not the case. Although bankruptcy will leave you with a poor 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 on time, and you demonstrate a responsible use of credit. Obviously, you won’t have the capacity to obtain a mortgage straight after you’re discharged, so it’s vital to build your credit score carefully before even thinking about securing a home loan.

Check Your Credit On A Regular Basis

Most financial experts advise that discharged bankrupts should check their credit report about twice a year. After initially filing for bankruptcy though, it’s essential that you examine 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 avoid any further difficulties, it’s essential that you keep track of your credit report to make sure that it’s accurate and up to date.

Even though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial restraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Acquiring home loans and other lines of credit will be possible a few years after discharge if the recovery process is well-planned and implemented. Hence, it’s important 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 taken into account to ensure a smooth recovery process. If you’re thinking of filing for bankruptcy, contact Fresh Start Solutions Canberra on 1300 818 575 or visit their website for additional information: https://freshstartsolutions.com.au/bankruptcy-canberra


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