Bankruptcy is not a decision that should be taken lightly. There are some major financial consequences involved and your financial freedom will be confined for years to come. This doesn’t indicate 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 people file for bankruptcy every year and most of them are able to buy homes, cars and attain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will not surprisingly give you insight into making better financial decisions in the future.
Essentially, once you have declared bankruptcy, you give up control of your finances and assets to a Trustee for protection against legal proceeding that could be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a certain period of time (in most cases three years) after which time you’ll become discharged, which signifies that the financial restrictions 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 file for 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 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 regarding 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 many 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 lots of discharged bankrupts is that they will immediately be offered credit by a large variety of loan providers. The main reason behind this is that you won’t have the ability to file for bankruptcy again for an extensive period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. In certain situations, securing a loan and making timely repayments will help strengthen your credit history, which will help you in the recovery process. But be cautious, you don’t want to accept every offer thrown in your direction as some financial institutions are very dubious and include hidden fees and charges that can put you in debt again instantly. The trick is to rebuild your credit rating steadily.
Buying A Home Is Certainly Possible
There’s a typical misconception that after you file for bankruptcy, you will no longer have the opportunity to acquire credit for a home loan. This is certainly not the case. While bankruptcy will leave you with a bad credit score, 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 display a responsible use of credit. Of course, you won’t be able to acquire a mortgage straight after you’re discharged, so it’s critical to build your credit score intelligently before even envisioning securing a mortgage.
Check Your Credit Regularly
Most financial specialists advise that discharged bankrupts should review their credit report around twice a year. After initially declaring bankruptcy though, it’s important that you review your credit report each month for at least the first six 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 minimise any further complications, it’s important that you monitor your credit report to make sure 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 restraints 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. Obtaining a mortgage and other credit lines will be possible a few years after discharge if the recovery process is well-planned and executed. For this reason, it’s crucial 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 consideration to ensure a smooth recovery process. If you’re considering filing for bankruptcy, phone Bankruptcy Experts Sunshine Coast on 1300 795 575 or visit their website for more details: www.bankruptcyexpertssunshinecoast.com.au