Insolvency or more widely known as bankruptcy is more often than not considered as a last resort when an individual by all means cannot afford to pay their debts when it is due. Generally, if you are first time bankrupt, your discharge period is usually less than a year. It is not always automatic and you might not actually be freed from certain liabilities. If this is not your first time within the last fifteen years, you definitely will not be automatically discharged and you might only be able to apply to the related court for a discharge after five years from the date of your current order.

Going bankrupt is never the end of the world. You might be tempted to just sit back and watch the world evolve as you hide quietly in the safety of your own abode, doing nothing, because, you are aware that the bankruptcy stays in your file for ten years. You may not really see the point of moving on. This might not be a good move on your part because your indifference might only get you in deeper financial trouble.

There are many ways for you to rise from the stigma of going bankrupt and you might want to start by repairing your credit rating. Doing so takes a lot of hard work and determination. You might want to prepare yourself mentally, physically and emotionally to ensure that in the process of repairing your credit after bankruptcy, you won’t retract yourself from the world and sink into an even deeper depression. If possible, get the moral support from your loved ones or close friends and relatives. They might not be able to assist you financially but help comes in many forms and you would be wise to take it in any way that it comes.

To repair your credit ratings, you may want to know your current credit report. It is advisable that you check your credit report to ensure that the insolvency is reflected in the report as it should be with no detail left out or added in. The debts that were part of your insolvency must be properly noted, so that your creditors know that the items usually marked with a “BK” notation are no longer in your pool of debt. You might want to check your credit report several times for any error to be corrected.

It is also advisable that you work out a tight budget on your daily life and stick to it. As harsh or extreme as the budget may seem at the beginning, you might see the benefit later in the long run as you probably will end up saving more money than before. The tight budget may also be to train you to be frugal and live within your means. It won’t do you any harm if you are to learn living on cash alone. Be strict with yourself and never try to rationalize any unnecessary purchases, for whatever reason.

You might also want to note if you still have your student loan to pay off. Student loans are not likely to be discharged in an insolvency case. Hence, you may have the opportunity to rebuild your credit score by paying back your student loans on time and on schedule. By consistently making your monthly due payments, your credit rating will definitely improve and you may use the slow but sure credit score increase to convince other lenders that you are serious about turning your life around. It may be important that you maintain good credit rating, so that later on, when you wish to apply for any other loan, your creditors might be able to see that you are capable of handling higher debt loads. Logically, you might think that it might be for your own benefit to stay out of the credit market while you are rebuilding your life. Although doing so might help you stay financially healthy, it is not really going to improve your credit score which is what you might want to be aiming for in the first place.

After bankruptcy, you might think that you are never going to recover. You probably might want to change your mind and regain control of your life. ou might want to learn to prioritize your needs and stay away from spending what little cash you have on unnecessary luxuries. All in all, it all comes down to your own determination and drive to come out of insolvency alive and roaring.

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Category: Finances
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