Upon obtaining the protection of bankruptcy you will not notice anything different. You will get up and go to work the same as you have always done. Life goes on.
Within the first couple of weeks the phone calls from creditors will stop as creditors become aware of your bankruptcy. You will have certainty, knowing that creditors can not pursue garnishee notices or writs of execution against you. Your wages will be for your needs.
Your stress levels will start to decrease as the pressure pertaining to money diminishes.
From feedback we have received it typically takes about 3 months for stress levels to return to normal. Having said that, we note that everyone is different.
It is important for you to make sure that the benefit of bankruptcy is not limited to the removal of liabilities that you cannot pay. Bankruptcy should also improve your quality of life. To assist with this process, we give you the following suggestions:
The dynamics of your life will likely have changed as a consequence of the financial pressure you have been under. Take a step back and assess how your life is working and whether you would like it to change. What are your priorities? For example:
- do you want to spend more time with your spouse?
- do you want to spend more time with your kids?
- do you want to pursue a hobby?
- do you want to take time to smell the roses?
- do you want to pursue studies?
- do you want to change jobs?
- do you want to pursue a new career?
- do you want to play more sport?
- do you want to get fit etc?
Identify what caused your financial problems and learn from your experience
There is nothing wrong with making mistakes but it is wrong to not learn from your mistakes.
Below are some examples of what people have told us caused their financial problems and actions they took to prevent the same problem from happening again:
- excessive use of credit cards – decided to only have a Debit Card in the future to avoid the temptation to spend without regard.
- inability to manage money – sought budgeting training by asking friends who could budget to show them how it is done and provide coaching support.
- gambling – sought help from counselling services and joined a group of people who were also trying to beat a gambling habit.
- debts from failed business – sought employment as his skillset and talents were being underutilised due to the distraction of having to run a business for which he had not been properly trained.
Identify where you want to be in 3 years time and 10 years time
Having liabilities that you cannot pay puts a lot of pressure on you and your family. Bankruptcy is a circuit breaker and creates a great opportunity for you to reassess where you are at and where you are going.
The 3 years of bankruptcy can be very formulative for future years. Many people aim to work on the essentials of life during bankruptcy and recover from what they have done without during the period of extreme financial stress. For example, start to get some new clothes, replace household items that are broken, start having holidays, join a gym, commence studying etc.
What would be your plan for the three years of bankruptcy?
We also recommend to persons considering bankruptcy that they have a think about where they want to be in 10 years time and how they will get there. Some of the answers we have received to this question are:
- to be living stress free and enjoying life.
- to have the kids educated and to be starting to think about retirement.
- to have saved for retirement.
- to own a home and be making significant inroads into the mortgage.
Where would you want to be in 10 years time and how do you plan to get there?
Bankruptcy resolves unmanageable debt and creates opportunity. What that opportunity is – well, that’s up to you!