Bankruptcy is not a decision that should be taken lightly. There are some heavy financial consequences involved and your financial freedom will be restrained for years to come. This doesn’t imply that filing for bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of people file for bankruptcy each year and the majority of them have the ability to buy homes, cars and obtain credit cards after they’re discharged. In addition to this, understanding what life is like after you have declared bankruptcy will definitely give you insight into making better financial decisions in the future.
Basically, once you have filed for bankruptcy, you relinquish control of your finances and assets to a Trustee in exchange for protection against legal action 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 implies that the financial stipulations you incurred during bankruptcy are removed. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article strives 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 restraints of declaring bankruptcy is that you cannot exit the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll have to provide a lot of details 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 most cases will increase the length of your undischarged bankruptcy to a minimum of five years rather than 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 file for 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. In certain situations, acquiring a loan and making timely repayments will help improve your credit history, which will help you in the recovery process. But be wary, 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 immediately. The trick is to rebuild your credit record progressively.
Buying A Home Is Certainly Possible
There’s a common misconception that after you declare bankruptcy, you will no longer be able to attain credit for a home loan. This is certainly not the case. Whilst bankruptcy will leave you with a bad credit record, you can still buy a home if you’re able to rebuild your credit within a few years, you pay all your bills on time, and you display a responsible use of credit. Needless to say, you won’t have the capacity to obtain a mortgage straight after you’re discharged, so it’s imperative to build your credit history sensibly before even thinking of securing a mortgage.
Check Your Credit Frequently
Most financial specialists advise that discharged bankrupts should check their credit report at the very least twice a year. After initially filing for bankruptcy though, it’s important that you examine 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 steer clear of any further difficulties, it’s paramount that you monitor your credit report to ensure it’s correct and up to date.
Though bankruptcy isn’t the preferred situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some severe financial constraints imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re perfectly capable of securing a bright financial future. Securing home loans and other lines of credit will be possible a couple of years after discharge if the recovery process is well-planned and executed. Hence, it’s critical that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to need to be considered to ensure a smooth recovery process. If you’re thinking of filing for bankruptcy, speak to Bankruptcy Experts Toowoomba on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertstoowoomba.com.au