Bankruptcy is not a decision that should be taken lightly. There are some unpleasant financial consequences involved and your financial freedom will be confined for several years to come. This doesn’t suggest that declaring bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy each year and a lot of them are able to buy homes, cars and attain 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.
Generally speaking, once you have filed for bankruptcy, you surrender control of your finances and assets to a Trustee for protection against legal proceeding 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 three years) after which time you’ll become discharged, which means that the financial restraints 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 aspires 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 restrictions of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll need 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 internationally without prior approval from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to a minimum of five years as opposed to three.
You Will Be Offered Credit Immediately
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a variety of lending institutions. The explanation behind this is that you won’t be able to file for bankruptcy again for an extended period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Occasionally, acquiring a loan and making timely repayments will help improve your credit history, which will assist you in the recovery process. But beware, you don’t want to take every offer thrown in your direction as some lending institutions are very dubious and include hidden fees and charges that can put you in debt again instantly. The key is to rebuild your credit rating progressively.
Buying A Home Is Certainly Possible
There’s a standard misconception that whenever you declare bankruptcy, you will no longer be able to attain credit for a home loan. This is definitely not the case. Even though bankruptcy will leave you with a poor credit record, you can still buy a home if you manage 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. Obviously, you won’t have the ability to get a mortgage straight after you’re discharged, so it’s necessary to build your credit record carefully before even thinking of securing a mortgage.
Check Your Credit Regularly
Most financial experts advise that discharged bankrupts should inspect their credit report at least twice a year. After initially declaring bankruptcy though, it’s vital that you take a look at your credit report each month for at least the first 6 months into your bankruptcy. Various 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 stay clear of any further complications, it’s critical that you monitor your credit report to make sure 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 restrained. There are some serious financial constraints 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. Attaining a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and executed. Therefore, it’s imperative that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to must be taken into account to ensure a smooth recovery process. If you’re considering declaring bankruptcy, speak with Bankruptcy Experts Gympie on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsgympie.com.au