HomePersonal FinanceHow You Can Achieve Financial Success after Going Bankrupt

How You Can Achieve Financial Success after Going Bankrupt

Bankruptcy is basically when the court examines the assets and liabilities of individuals who can’t pay back their loans in order to decide whether to discharge those debts so that they are no longer legally liable to pay them. The idea behind this is to give the unfortunate individual a way out of their debt crisis for a fresh financial start.

Living in San Diego and contemplating filing for bankruptcy? Make sure you do some thorough research first so that you can choose the best bankruptcy attorney before making any decisions about how to proceed.

Declaring Bankruptcy can be because of numerous reasons for instance business failure, relationship problems, economic or structural changes or the act of nature. Before declaring bankruptcy it is important to always understand your bankruptcy options first.

In order to claim bankruptcy several forms will have to be filled with AFSA which are also available for download at their official website. They include the debtor’s petition, statement of affairs, some acknowledgements to be filled along with instructions sheets. A trustee is then appointed by the AFSA who manages the financial affairs of the bankrupt individual and may charge fees for this service. The bankruptcy usually ends 3 years and 1 day from when the bankruptcy application is accepted. The end of bankruptcy is referred to as discharge from bankruptcy.

Bankruptcy can also be annulled which is basically the cancellation of a bankruptcy. If the annulment is successful, the name still remains on National Personal Insolvency Index (NPII) with the bankruptcy listed as ‘annulled’. The three ways in which bankruptcy can be annulled are:

  • Firstly, by paying debts in full.
  • Secondly, by composition which is an offer made to creditor of something less than the payment in full. Acceptance of the offer requires a ‘yes’ vote from majority in number of creditors. If successful, this annuls bankruptcy. Although, the individual is still liable for any debts not covered by bankruptcy.
  • Lastly, by taking the case in the court and getting the judgment in your favor. It’s better to seek legal advice regarding this process. There is no restriction on applying for credit after bankruptcy ends but it is up to the credit provider. However, your credit report will continue to show your bankruptcy for few years depending on the circumstances.

The question that arises is how to get financial freedom after bankruptcy. In order to make better decisions ahead, there are many ways the Australian government is helping. The National debt helpline is always available for advice. You can also visit “Money Smart” which is an ASIC website containing free and impartial financial guidance and tools.

In addition, a link to the registered trustees contact list can also be found on the official website along with Debt agreement administrators contact list in order to find a registered debt agreement administrator. There is also free Financial counseling available which is offered by community organizations, community legal centers and government. Free legal advice and urgent money help can also be used in case you are trapped in financial crisis. External help can be taken from free external dispute resolution (EDR).

Consolidating or refinancing loans is another option. Debt consolidation is when you take one single loan to pay off a number of other loans hence there is only one creditor to deal with now. Debt refinancing is when you replace a loan for other because it offers better terms for instance interest rates. Both these options can be considered so that you don’t get trapped in financial crisis once again. But these are only rational choices if the repayment is practically possible for the debtor. Most importantly, they should only be taken after carefully studying the loan terms and by making sure they are licensed by ASIC.

There are other ways to ensure that all your debts are being paid simultaneously. Such as, an automatic payment from the bank account to the creditors can be paid monthly then after fully paying one debtor you can use the same process for the next one in line. This way you pay your creditors first and then incur your own expenses.

An arrangement can also be made that all the extra repayments to go directly your creditor. It’s better to make monthly repayment on each debt at the same time.

An important part in achieving financial freedom after bankruptcy is focusing on how to manage the financial affairs well now. Setting a realistic budget can help a lot as it makes you in control. Once your budget is set, you’ll get to know how much money you have left over and can then allocate it efficiently.

Also Read: 5 Things Financially Smart People Do Differently

All the projects that come in the future should be carefully considered to make sure that they are profitable in the end for instance by using BCR, IRR or cost benefit analysis or by simply using a financial advisor services.

Furthermore, accounts should be maintained of each person you have financial relation with so that you always have a clear picture of where you stand.

Financial freedom may seem like a time taking process but with the right strategy and the right amount of confidence you can really come back to life by enhancing your financial position.

Author Bio:

Steven Rooyen is a husband, father, senior debt advisor and a financial consultant at Sort My Debt. With over a decade of experience in different financial fields, Steven has helped many people resolve their debt problems and provide debt help in Australia. While not doing that, you can find him reading books and roaming with friends.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


  1. Yes, I agree with what you said. I also think that we can achieve financial success when you avoid debt. I also think that when you have debts, it’s better to pay off all of the debts first. This article is very helpful. Thanks for sharing this article.


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