What Is It Like To Go Bankrupt?
here’s no doubt that bankruptcy isn’t a desirable situation to be grappling with. There are some major financial consequences involved and it’s a very demanding and stressful process that will affect you financially for several years to come. Ending up in mountains of debt can transpire in a heartbeat, and many individuals end up in this situation due to a multitude of factors. Not being able to work resulting from illness is one of the most common reasons why people file for bankruptcy. It’s not as if they had any control over the situation, but being unable to repay their debts given that they have no income is the hard reality they will have to face. Actually, 7,900 individuals in Australia filed for bankruptcy in the March 2017 quarter1, so it’s not as uncommon as some people think. In my opinion, bankruptcy is neither good nor bad. Without a doubt, those who declare bankruptcy have made some bad financial decisions and will punished accordingly, nonetheless filing for bankruptcy is also the first step to financial freedom. Some people struggle for years just to make ends meet, while their debts keep worsening, so in many cases, bankruptcy is an opportunity for a clean slate for those that are unable to repay their debts.
Though I’ve never been bankrupt personally, I’ve witnessed the journey of many individuals who have and surprisingly, many people are better off and glad they went through the process. If you’re facing financial hardship and thinking about bankruptcy, this article will outline what life is like after you declare bankruptcy.
You Won’t Be Debt Free By Declaring Bankruptcy
Bankruptcy is quite complicated, and there is a general misconception that all debts are eliminated by declaring bankruptcy. This is certainly not the case. There are various sorts of debts that won’t be cleared, for example Centrelink debts, HECS debts, child support, court imposed fines (for example speeding tickets), and money that is owed to an insurance provider resulting from a car accident where you were uninsured and in the wrong. But, filing for bankruptcy will remove debts like credit cards, GST and tax, and unsecured personal loans. The reality is, you will still have debts to pay after you declare bankruptcy, but the most critical debts in most cases, such as credit cards, will be removed.
Feelings Of Remorse And Embarrassment Are Normal
Bankruptcy is an arduous process and many people who file for bankruptcy have feelings of remorse and shame; as if they’ve lost in life. This is natural, however it’s essential to overcome these emotions because the truth is, humans make mistakes, and bankruptcy is a way that you can go back to square one financially and get your life back on track. The sooner you recover from these feelings of guilt, the sooner you’ll be able to start the recovery process and develop a plan of how you’re going to repay your remaining debts and rebuild your credit history. Don’t forget, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit report, so it’s certainly not the end of the world.
You Can’t Borrow Any Money For Three Years
Unfortunately, by filing for bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s important that you start rebuilding your credit history by maintaining a stable income and paying your bills and remaining debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the option to acquire loans for secured assets like houses and cars, but your interest rates will be much higher because of your bad credit report. Even though it’s not always suggested to attain loans straight away, it is possible. After seven years from the time you became bankrupt, your credit history will be clean, and you will have the chance to secure all types of loans again at competitive rates.
Life after declaring bankruptcy definitely isn’t easy, but the emotional relief that most individuals experience after beginning the process certainly softens the blow. There are some major financial implications involved, but filing for bankruptcy is the first step towards financial freedom and securing a bright future for you and your family. If you’re experiencing financial distress, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep struggling financially for years because you’re afraid of the stigma related to bankruptcy. It’s difficult, but it’s also not the end of the world. If you ‘d like to talk to someone about your financial circumstances, contact Bankruptcy Experts Tablelands on 1300 795 575 for a confidential discussion, or alternatively visit their website for more information: http://www.bankruptcyexpertstablelands.com.au