Bankruptcy is not a decision that should be taken lightly. There are some taxing financial consequences involved and your financial freedom will be limited for years to come. This doesn’t suggest that declaring 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 declare bankruptcy each year and most of them have the ability 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 naturally give you insight into making better financial decisions in the future.
In essence, once you have filed for bankruptcy, you relinquish control of your finances and assets to a Trustee for protection against legal proceeding that might be taken by your creditors. Once the legal process has been finalised, you’ll be undischarged for a specific period of time (in most cases 3 years) after which time you’ll become discharged, which implies that the financial constraints you suffered during bankruptcy are removed. 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 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 only if you seek permission from your Trustee. To do this, you’ll need 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 to another country without prior consent from your bankruptcy Trustee, and in many 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 a lot 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 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. Occasionally, securing a loan and making timely repayments will help strengthen your credit rating, which will aid you in the recovery process. But be warned, 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 immediately. The trick is to rebuild your credit record gradually.
Buying A Home Is Certainly Possible
There’s a standard misconception that when you declare bankruptcy, you will no longer have the capacity to secure credit for a mortgage. This is certainly not the case. Though bankruptcy will leave you with a bad credit history, 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 on time, and you demonstrate a responsible use of credit. Needless to say, you won’t have the capacity to acquire a home loan straight after you’re discharged, so it’s essential to build your credit score sensibly before even thinking about securing a home loan.
Check Your Credit On A Regular Basis
Most financial experts recommend that discharged bankrupts should take a look at their credit report about twice a year. After initially filing for bankruptcy though, it’s paramount that you inspect your credit report every month for at least the first six months into your bankruptcy. A couple of creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to avoid any further difficulties, it’s pressing that you monitor your credit report to make sure that it’s accurate and up to date.
While bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently constrained. There are some severe financial restrictions imposed on individuals that declare bankruptcy, but after they become discharged and slowly rebuild their credit score, they’re completely capable of securing a bright financial future. Acquiring a mortgage and other credit lines will be possible a couple of years after discharge if the recovery process is well-planned and executed. For this reason, it’s paramount 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 considering declaring bankruptcy, reach out to Bankruptcy Experts Rockhampton on 1300 795 575 or visit their website for more information: www.bankruptcyexpertsrockhampton.com.au