Bankruptcy is not a decision that should be taken lightly. There are some heavy financial repercussions involved and your financial freedom will be limited for several years to come. This doesn’t mean that declaring bankruptcy is the end of the world though. It should actually be regarded as the first step in securing a bright financial future for you and your family. Millions of people declare bankruptcy each year and a lot of them are able to buy homes, cars and acquire credit cards after they’re discharged. Along with 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.
Fundamentally, once you have declared bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against potential lawsuits that might 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 3 years) after which time you’ll become discharged, which indicates that the financial restraints 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 file for bankruptcy and what options you’ll have after you become discharged.
You Can’t Leave The Country Without Permission
One of the restraints of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you request permission from your Trustee. To do this, you’ll need to provide 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 approval from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to at least five years as opposed to three.
You Will Be Offered Credit Instantly
One thing that surprises many discharged bankrupts is that they will immediately be offered credit by a wide range of lenders. The main reason behind this is that you won’t be able to declare bankruptcy again for a long period of time, so creditors understand that they have a good chance of getting their money back if you secure a loan. Sometimes, securing a loan and making timely repayments will help improve your credit history, which will aid you in the recovery process. But be wary, you don’t want to accept every offer thrown in your direction as some creditors are very dubious and include hidden fees and charges that can put you in debt again immediately. The trick is to rebuild your credit history gradually.
Buying A Home Is Certainly Possible
There’s a regular misconception that after you declare bankruptcy, you will no longer have the chance to secure credit for a mortgage. This is certainly not the case. Though bankruptcy will leave you with a poor credit record, you can still purchase a home if you have the ability to rebuild your credit within a few years, you pay all your bills on time, and you exhibit a responsible use of credit. Naturally, you won’t be able to acquire a mortgage straight after you’re discharged, so it’s vital to build your credit score intelligently before even thinking about securing a home loan.
Check Your Credit On A Regular Basis
Most financial specialists recommend that discharged bankrupts should take a look at their credit report at the very least twice a year. After initially declaring bankruptcy though, it’s critical that you inspect your credit report each month for at least the first six months into your bankruptcy. Some 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 prevent any further complications, it’s important that you monitor 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 limited. There are some severe financial restrictions imposed on individuals that file for bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re perfectly capable of securing a bright financial future. Attaining a mortgage and other credit lines will be possible a couple of years after discharge if the recovery process is well-planned and executed. Thus, it’s paramount that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is rather complicated and there are many factors to should be considered to ensure a smooth recovery process. If you’re thinking about filing for bankruptcy, talk to Bankruptcy Experts Albury on 1300 795 575 or visit their website for more details: www.bankruptcyexpertsalbury.com.au