|June 20, 2017||Comments Closed|
Bankruptcy is not a decision that should be taken lightly. There are some serious financial consequences involved and your financial freedom will be restrained for many years to come. This doesn’t suggest that filing for 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 individuals file for bankruptcy every year and many of them have the ability to buy homes, cars and obtain credit cards after they’re discharged. Along with this, understanding what life is like after you have declared bankruptcy will clearly give you insight into making better financial decisions in the future.
In simple terms, once you have filed for bankruptcy, you hand over control of your finances and assets to a Trustee in exchange for protection against potential lawsuits that may 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 three years) after which time you’ll become discharged, which signifies that the financial limitations 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 tries 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 drawbacks of declaring bankruptcy is that you can’t leave the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll have to provide 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 approval from your bankruptcy Trustee, and in most cases will increase the length of your undischarged bankruptcy to at least five years rather than three.
You Will Be Offered Credit Straight Away
One thing that surprises a lot of discharged bankrupts is that they will immediately be offered credit by a large range of creditors. The explanation behind this is that you won’t be able to declare 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, acquiring a loan and making timely repayments will help improve your credit history, which will aid you in the recovery process. But be cautious, you don’t want to take every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again immediately. The key is to rebuild your credit rating progressively.
Buying A Home Is Definitely Possible
There’s a typical misconception that after you file for bankruptcy, you will no longer have the ability to secure credit for a home loan. This is definitely not the case. Though bankruptcy will leave you with a poor credit score, you can still buy a home if you have the ability to rebuild your credit within a couple of years, you pay all your bills in a timely manner, and you exhibit a responsible use of credit. Needless to say, you won’t have the ability to acquire a mortgage straight after you’re discharged, so it’s important to build your credit score carefully before even envisioning securing a mortgage.
Check Your Credit Regularly
Most financial specialists advise that discharged bankrupts should examine their credit report at least twice a year. After initially filing for bankruptcy though, it’s crucial that you inspect your credit report monthly for at least the first six months into your bankruptcy. A number of creditors may still be demanding payments despite the fact that you are not required to make payments on any debts that were discharged in the bankruptcy process. So to avoid any further complications, it’s imperative that you keep track of your credit report to ensure it’s accurate and up to date.
Whilst bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently restrained. There are some severe financial restraints imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit rating, they’re perfectly capable of securing a bright financial future. Obtaining a mortgage and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and executed. Therefore, it’s essential 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 must be taken into consideration to ensure a smooth recovery process. If you’re thinking of declaring bankruptcy, get in touch with Bankruptcy Experts Mount Isa on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertsmountisa.com.au