Bankruptcy is not a decision that should be taken lightly. There are some harsh financial repercussions involved and your financial freedom will be restricted for many years to come. This doesn’t mean that declaring bankruptcy is the end of the world though. It should really be regarded as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy every year and many of them have the capacity to buy homes, cars and acquire credit cards after they’re discharged. Further to this, understanding what life is like after you have filed for bankruptcy will surely give you insight into making better financial decisions in the future.
Generally speaking, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against legal action that might be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases three years) after which time you’ll become discharged, which implies that the financial constraints you sustained 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 declare 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 can’t leave the country while you’re undischarged only if you request permission from your Trustee. To do this, you’ll need to supply a lot of information relating to your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel overseas without prior permission from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to at least five years instead of three.
You Will Be Offered Credit Immediately
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a wide variety of financial 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. In some situations, obtaining a loan and making timely repayments will help strengthen your credit rating, which will help you in the recovery process. But be warned, you don’t want to take every offer thrown in your direction as some loan providers are very dubious and include hidden fees and charges that can put you in debt again straight away. The key is to rebuild your credit rating progressively.
Buying A Home Is Certainly Possible
There’s a general misconception that when you file for bankruptcy, you will no longer have the opportunity to attain credit for a home loan. This is definitely not the case. While bankruptcy will leave you with a poor credit history, you can still buy a home if you manage to rebuild your credit within a few years, you pay all your bills in a timely manner, and you demonstrate a responsible use of credit. Of course, you won’t have the ability to acquire a mortgage straight after you’re discharged, so it’s paramount to build your credit record intelligently before even thinking of securing a home loan.
Check Your Credit On A Regular Basis
Most financial specialists recommend that discharged bankrupts should review their credit report at least twice a year. After initially declaring bankruptcy though, it’s imperative that you take a look at your credit report monthly for at least the first 6 months into your bankruptcy. A couple of creditors may still be demanding payments even though 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 necessary that you monitor your credit report to make sure that it’s accurate 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 people that file for bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Acquiring a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Consequently, it’s important that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is considerably complicated and there are many factors to should be considered to ensure a smooth recovery process. If you’re thinking of declaring bankruptcy, reach out to Bankruptcy Experts Shellharbour on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsshellharbour.com.au