Bankruptcy is not a decision that should be taken lightly. There are some heavy financial repercussions involved and your financial freedom will be restrained for several years to come. This doesn’t suggest that filing for 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 individuals declare bankruptcy every year and many of them have the capacity to buy homes, cars and attain credit cards after they’re discharged. Further to this, understanding what life is like after you have declared bankruptcy will naturally give you insight into making better financial decisions in the future.
Essentially, once you have filed for bankruptcy, you give up control of your finances and assets to a Trustee for protection against legal action that might 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 indicates that the financial stipulations 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 intends 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 limitations of declaring bankruptcy is that you cannot leave the country while you’re undischarged only if you seek permission from your Trustee. To do this, you’ll have to supply a lot of details regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel to another country 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 as opposed to three.
You Will Be Offered Credit Right Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a variety of creditors. The main reason behind this is that you won’t have the capacity to file for bankruptcy again for a lengthy period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In certain situations, obtaining a loan and making timely repayments will help improve your credit rating, which will aid you in the recovery process. But be cautious, you don’t want to accept 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 straight away. The trick is to rebuild your credit rating steadily.
Buying A Home Is Definitely Possible
There’s a standard misconception that when you declare bankruptcy, you will no longer have the chance to secure credit for a home loan. This is definitely not the case. Whilst bankruptcy will leave you with a poor credit score, you can still purchase a home if you manage to rebuild your credit within a few years, you pay all your bills in a timely manner, and you exhibit a responsible use of credit. Obviously, you won’t have the ability to get a home loan straight after you’re discharged, so it’s essential to build your credit rating wisely before even thinking about securing a mortgage.
Check Your Credit Frequently
Most financial specialists recommend that discharged bankrupts should review their credit report around twice a year. After initially filing for bankruptcy though, it’s vital that you examine your credit report every month for at least the first 6 months into your bankruptcy. Some 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 steer clear of any further complications, it’s paramount that you keep an eye on your credit report to make sure that it’s correct and up to date.
Though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restrictions imposed on individuals 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 lines of credit will be possible a few years after discharge if the recovery process is well-planned and implemented. Thus, it’s important 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 have to be taken into account to ensure a smooth recovery process. If you’re thinking of filing for bankruptcy, reach out to Bankruptcy Experts Hervey Bay on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsherveybay.com.au