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- May 30, 2017
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There’s no doubt that are some substantial financial consequences in declaring bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this situation, don’t be alarmed. The tough economic times witnessed today means that a growing number of people are filing for bankruptcy. In fact, there are as much as 20,000 Australians each year that declare bankruptcy. So rest assured, you’re not alone.
Rather than dwelling on the past, it’s vital 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 adjustments need to be made to secure a bright future for you and your family. So here are a couple of simple strategies that you can use to best recover after declaring bankruptcy.
It’s common for individuals who declare bankruptcy to feel feelings of failure, self-loathing and guilt. Though it may seem natural have these feelings, being bankrupt is the result of simply 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 much easier than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Confronting your financial problems is the first step in overcoming them, so you’re actually in a better position than you were prior to declaring bankruptcy.
It’s critical that you look at the reasons why you became bankrupt to make sure you don’t make the same mistakes again. Filing for bankruptcy offers you a second chance to get your finances in order, so it’s best you make the most of it. Even though there’s possibly a range of reasons why you filed for bankruptcy, most of them probably pertain to bad spending and borrowing habits. So it’s a good idea to produce a list of two or three things that led you to declaring bankruptcy and devote yourself to not making these oversights again.
Make a budget
After you’ve recuperated emotionally from bankruptcy, the next step is to put together a practical and manageable budget. You’ll have to review your earnings and expenses thoroughly, and figure out a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or forego some luxury items, becoming financially responsible is your leading priority. There are some easy ways to save money, for example eating at home as opposed to dining in restaurants and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unexpected expenses.
Pay your bills on time
The initial step in mending your bad credit rating is to ensure you pay all your bills on time. Though this won’t increase your credit rating instantly, it will ensure that your rating doesn’t drop any further. You might prefer to create automatic bill payments with your bank to guarantee that you don’t overlook 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 considered the single, most effective action you can take to restore your credit rating.
Increase your income
If you haven’t currently got consistent employment, now is the time to do so. Regular income over time will not only enhance your credit rating but it will allow you to increase your liquid assets, providing you with more choices. If you’re in a position where you can acquire a weekend job, you should sincerely consider it. Or have a look at your hobbies and aim to develop a way to increase your earnings by doing something that you love. Cash is king when you’re bankrupt so anyway to increase your earnings is an excellent idea.
Although declaring bankruptcy is never an easy decision, it is the first step in confronting your financial troubles and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that brought about your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will improve your credit rating gradually, and sticking to a budget is very important. If you’re thinking about filing for bankruptcy and need some advice on your options, contact Bankruptcy Experts Gladstone today on 1300 795 575 or visit www.bankruptcyexpertsgladstone.com.au