Debt Advice for Life after Bankruptcy

If you’ve sought debt advice and been advised bankruptcy is the only option, it can feel like the end of the world. However, you still have to lead a life after bankruptcy and it’s best to look forward and think about how you’re going to deal with your finances and rebuild your life. You will typically be discharged from your bankruptcy order after a period of 12 months but what are the main things you need to consider afterwards?

Making your repayments

Your bankruptcy order will usually be accompanied by an income payment order. This order means you will have to pay an agreed monthly sum to be distributed between your creditors, normally for a period of 3 years. It’s important to comply with this income payment order so that you can pay your dues and get your life back to some normality as soon as possible.

Learn from your mistakes

People become bankrupt for many different reasons from reckless spending to being made redundant and not being able to cope financially. Whatever the circumstances surrounding your bankruptcy were it’s important to learn from your mistakes and move forward with your life.

Cover yourself

If you’ve been made bankrupt once, you will not want to repeat the experience. Regardless of how you ended up being bankrupt the first time around, it’s important to cover yourself by arranging insurance policies to prevent it from happening again. For example, could you cope financially if you were made redundant or had to go off work for an extended period with illness?

Rebuilding relationships

The consequences of bankruptcy can be severe, not just for you but your family as well. Depending on your circumstances you could lose your home and your job when you’re made bankrupt so it can clearly have a devastating effect on those around you, particularly if they were unaware of the extent of your debt problems. Because of the social stigma that still surrounds bankruptcy you may find you have to work hard at rebuilding relationships with friends and family who have taken a judgemental viewpoint on your situation.

How your credit rating will be affected

Bankruptcy is the worst thing that can happen to your credit rating. You should be prepared for the fact that your credit score will be badly affected for at least 6 years due to your bankruptcy and possibly even longer if you don’t comply with all the conditions. Even if you do want to apply for credit again, you’ll find that lenders will take your bankruptcy into account and charge you a higher rate of interest accordingly.

Summary

If your debts have become overwhelming, don’t just assume that bankruptcy is your only option. You should seek professional debt advice as soon as you’re struggling to cope as there may be other alternatives open to you that could mean the difference between keeping your home and job or losing them both. It’s important to remember that here is life after bankruptcy and it’s how you cope as you move forward that will make the difference to your quality of life.