There’s no doubt that are some significant financial repercussions in declaring bankruptcy, and there’s no question that your life will go through some considerable changes. If you’re in this predicament, don’t be alarmed. The tough economic times experienced today means that more and more individuals are declaring bankruptcy. In reality, there are roughly 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.

 

Rather than dwelling on the past, it’s critical that you look towards the future and attempt to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some alterations have to be made to secure a bright future for you and your family. So here are a number of simple strategies that you can use to best recover after declaring bankruptcy.

 

Emotional recovery

 

It’s typical for people who file for bankruptcy to feel emotions of failure, self-loathing and remorse. While it may seem natural have these thoughts, 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 very first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you succumb 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 prior to filing for bankruptcy.

 

Self-Evaluation

 

It’s important that you look at the reasons why you became bankrupt to make sure that 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 probably a number of reasons why you filed for bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a smart idea to make a list of two or three things that led you to declaring bankruptcy and commit yourself to not making these errors again.

 

Create a budget

 

Once you’ve rebounded emotionally from bankruptcy, the next step is to create a realistic and conceivable budget. You’ll need to consider your income and expenses closely, and work out a way to save money while still paying all of your living expenses. Even if it means that you downsize your house or bypass some luxury items, becoming financially sound is your leading priority. There are some practical ways to save money, for instance eating at home as opposed to eating out and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unanticipated expenses.

 

Pay your bills on time

 

The 1st step in mending your bad credit rating is to ensure you pay all your bills on time. Though this won’t improve your credit rating immediately, it will ensure that your rating doesn’t drop any further. You might choose to set up automatic bill payments with 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 considered as the single, most powerful 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. Consistent income over time will not only increase your credit rating but it will permit you to increase your liquid assets, providing you with more options. If you’re in a position where you can get a weekend job, you should sincerely consider it. Or have a look at your interests and aim to discover 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 fantastic idea.

 

Though filing for bankruptcy is never an easy decision, it is the very first step in dealing with your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s essential that you reflect on the reasons that led to your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating progressively, and adhering to a budget is paramount. If you’re considering filing for bankruptcy and need some advice on your options, reach out to Bankruptcy Experts Gympie today on 1300 795 575 or visit www.bankruptcyexpertsgympie.com.au