What Happens After You File For Bankruptcy
Bankruptcy is not a decision that should be taken lightly. There are some major financial implications involved and your financial freedom will be constrained for many years to come. This doesn’t suggest that declaring 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 declare bankruptcy every year and most of them are able to buy homes, cars and obtain credit cards after they’re discharged. Further to this, understanding what life is like after you have filed for bankruptcy will most definitely give you insight into making better financial decisions in the future.
Basically, once you have declared bankruptcy, you hand over control of your finances and assets to a Trustee for protection against legal action that might be taken by your creditors. Once the legal process has been completed, 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 aims 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 drawbacks of declaring bankruptcy is that you cannot leave the country while you’re undischarged only if you request 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 internationally without prior permission from your bankruptcy Trustee, and in many cases will increase the duration of your undischarged bankruptcy to a minimum of five years rather than three.
You Will Be Offered Credit Instantly
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 capacity to declare 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. Sometimes, acquiring a loan and making timely repayments will help improve your credit history, which will aid you in the recovery process. But be careful, you don’t want to take every offer thrown in your direction as some lenders are very dubious and include hidden fees and charges that can put you in debt again straight away. The trick is to rebuild your credit history gradually.
Buying A Home Is Certainly Possible
There’s a typical misconception that whenever you declare bankruptcy, you will no longer have the opportunity to acquire credit for a mortgage. This is definitely not the case. Though bankruptcy will leave you with a bad credit rating, 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 display a responsible use of credit. Of course, you won’t have the capacity to acquire a home loan straight after you’re discharged, so it’s critical to build your credit history wisely before even thinking of securing a home loan.
Check Your Credit On A Regular Basis
Most financial specialists advise that discharged bankrupts should examine their credit report about twice a year. After initially filing for bankruptcy though, it’s paramount that you take a look at your credit report monthly for at least the first 6 months into your bankruptcy. A number of creditors may still be requesting 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 difficulties, it’s crucial that you keep track of your credit report to make sure it’s correct and up to date.
While bankruptcy isn’t the most ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some serious financial restraints imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re completely capable of securing a bright financial future. Securing home loans 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 must be taken into consideration to ensure a smooth recovery process. If you’re contemplating filing for bankruptcy, contact Bankruptcy Experts Tablelands on 1300 795 575 or visit their website for additional information: www.bankruptcyexpertstablelands.com.au