There’s no doubt that are some significant financial repercussions in filing for bankruptcy, and there’s no question that your life will experience some considerable changes. If you’re in this situation, don’t be alarmed. The challenging economic times witnessed today means that an increasing number of people are filing for bankruptcy. Actually, there are as much as 20,000 Australians each year that file for bankruptcy. So rest assured, you’re not alone.

Instead of dwelling on the past, it’s essential that you look towards the future and try to recover as best as possible. Bankruptcy doesn’t mean the end of the world, it just means that some changes need to be made to secure a bright future for you and your family. So here are a couple of simple strategies that you can use to best recover after declaring bankruptcy.

Psychological recovery

It’s usual for people who file for bankruptcy to experience feelings of failure, self-loathing and remorse. Whilst it may seem natural have these thoughts, becoming bankrupt is the result of merely another mistake that all of us make as humans. You need to stop punishing yourself and look towards the future. Bankruptcy is the first step towards financial freedom, and recovering from a bad credit rating is less complicated than you think. The longer you succumb to these negative feelings, the longer it will take to recover. Facing your financial issues is the first step in overcoming them, so you’re already in a better position than you were prior to declaring bankruptcy.

Self-Evaluation

It’s essential that you look at the reasons why you became bankrupt to make sure that you don’t make the same mistakes again. Declaring bankruptcy gives you a second chance to get your finances in shape, so it’s best you make the most of it. Although there’s possibly a range of reasons why you filed for bankruptcy, all of them probably relate to bad spending and borrowing habits. So it’s a smart idea to make a list of two or three things that led you to filing for bankruptcy and devote yourself to not making these oversights again.

Make a budget

Once you’ve bounced back emotionally from bankruptcy, the next step is to develop a practical and conceivable budget. You’ll need to evaluate your income and expenses carefully, and develop a way to save money while still paying all your living expenses. Even if it means that you downsize your house or relinquish some luxury items, becoming financially responsible is your key priority. There are some easy ways to save money, such as eating at home as an alternative to eating out and cancelling your gym membership in favour of walking to work. Remember to include in your budget an amount for unanticipated expenses.

Pay your bills on time

The first step in mending your bad credit rating is to ensure you pay all your bills on time. While this won’t improve your credit rating straight away, it will ensure that your credit rating doesn’t go down any further. You might want to create automatic bill payments with your bank to ensure that you don’t overlook any payments. This will demonstrate to lenders that you’re financially responsible, and the longer you do this, the better your credit rating will get. This is regarded as the single, most effective action you can take to restore your credit rating.

Increase your income

If you haven’t already got steady employment, now is the time to do so. Consistent income over time will not only increase your credit rating but it will enable you to increase your liquid assets, providing you with more choices. If you’re in a position where you can obtain a weekend job, you should sincerely consider it. Or have a look at your hobbies and aim to discover a way to increase your income by doing something that you enjoy. Cash is king when you’re bankrupt so anyway to increase your income is a wonderful idea.

Whilst declaring bankruptcy is never an easy decision, it is the very first step in addressing your financial difficulties and learning from the past so you can enjoy financial freedom in the future. It’s essential that you review the reasons that caused your financial hardships to ensure they don’t happen again. Secure employment and paying your bills on time will increase your credit rating progressively, and sticking to a budget is paramount. If you’re considering declaring bankruptcy and need some advice on your options, contact Bankruptcy Experts Albury today on 1300 795 575 or visit www.bankruptcyexpertsalbury.com.au