|June 16, 2017||0|
Bankruptcy is not a decision that should be taken lightly. There are some heavy financial implications involved and your financial freedom will be limited for many years to come. This doesn’t indicate that filing for bankruptcy is the end of the world though. It should actually be regarded 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 ability to buy homes, cars and obtain credit cards after they’re discharged. Further to this, understanding what life is like after you have filed for bankruptcy will naturally give you insight into making better financial decisions in the future.
In a nutshell, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against potential lawsuits 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 implies that the financial limitations 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 tries to achieve is to give you an understanding of what happens after you declare 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 exit the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll have to supply a lot of details 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 most cases will increase the duration of your undischarged bankruptcy to a minimum of five years instead of three.
You Will Be Offered Credit Instantly
One thing that surprises plenty of discharged bankrupts is that they will immediately be offered credit by a large range of lenders. The explanation behind this is that you won’t be able 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. In some situations, securing a loan and making timely repayments will help improve your credit score, 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 financial institutions are very dubious and include hidden fees and charges that can put you in debt again immediately. The trick is to rebuild your credit history progressively.
Buying A Home Is Definitely Possible
There’s a frequent misconception that once you declare bankruptcy, you will no longer have the opportunity to obtain credit for a mortgage. This is definitely not the case. Though bankruptcy will leave you with a bad credit history, you can still buy a home if you have the capacity to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you display a responsible use of credit. Needless to say, you won’t have the ability to get a mortgage straight after you’re discharged, so it’s very important to build your credit score wisely before even considering securing a mortgage.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should check their credit report around twice a year. After initially filing for bankruptcy though, it’s necessary that you examine your credit report each month for at least the first six months into your bankruptcy. A few creditors may still be requesting payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to minimise any further difficulties, it’s essential that you keep an eye on your credit report to make sure that it’s accurate and up to date.
Though bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some serious financial constraints imposed on people that file for bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re completely capable of securing a bright financial future. Attaining a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and implemented. Therefore, it’s paramount that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is very complicated and there are many factors to need to be considered to ensure a smooth recovery process. If you’re considering declaring bankruptcy, talk with Fresh Start Solutions on 1300 818 575 or visit their website for more information: https://freshstartsolutions.com.au