Tips about bankruptcy
In fact, it’s about only doing things that will have a beneficial effect on your credit report.
- Recovering from a bankruptcy: Do not keep the same habits of consumption
Avoid buying products or services that consume your budget for no reason. Eliminate the superfluous.
- Recovering from bankruptcy: Do not make your personal bankruptcy a taboo subject
Make your loved ones benefit from your new knowledge. Inform them of the consequences of personal bankruptcy and how to avoid it.
- Recover from bankruptcy: Do not be alone with your problem
If the problem is “stronger than you,” then team up with a professional to solve your addiction problem, for example, or compulsive buyer. Avoid relapse at all costs.
- Reuse a new credit card too quickly
For credit card issuers, you are a prospect of choice, knowing that you have no debt. Wait at least six (6) months before resuming a standard credit card. Give yourself some time.
- Do not miss a single payment on your brand new credit
Choose the loan that is the least risky, depending on your situation. Be down to earth. Get directions. Build a good financial reputation.
- Do not take a third party for a loan that does not belong to you
This loan will be recorded in your credit file. Thus, even if all payments were made without delay, a new credit application may be denied and your interest rate may be revised upwards.
- Do not run out of provisions when paying by check
A personal bankruptcy weakens your credit report for 6 to 7 years. An NSF check (as well as any new rejected credit request) adds an additional discriminant rating.
- Do not neglect your tax duties
As mentioned above, after a personal bankruptcy, you are required to complete two (2) tax returns. Do not miss it!
- Do not judge by sight your new credit possibilities
Every time you apply for a credit, your new challenge is now to prove that you will be able to make your payments on time. You will need to convince lenders and financial institutions.
- Do not have a stable income
You can reduce the 6 to 7 years of financial redemption to lenders after a personal bankruptcy to within 3 years if you have stable cash inflows from a secure job during this period.
In summary, the Bankruptcy and Insolvency Act 178 was created to ensure that anyone who declares bankruptcy will, as soon as possible, become profitable to society.
Learn about the 13 main myths surrounding bankruptcy here…
What to do to get a mortgage after declaring bankruptcy?
Certainly, do not believe some myths that suggest that it is not possible to get a loan after a personal bankruptcy. On the contrary, it is entirely possible for you to see your credit application accepted after the liberation of your bankruptcy.
The most important element that lenders will rely on is your credit rating.
That’s why you have to put all your efforts into improving it. Your priority is to demonstrate that you have the ability to repay your debts. This maximizes your chances of a financial institution or traditional lender approving your loan application within the first two (2) years after the release of your personal bankruptcy.
After a bankruptcy, start rebuilding your credit rating without delay
Get a secured credit card to start raising your credit rating now.
This tool was created specifically to help people whose credit score is low, with the aim of helping them to restore it after a personal bankruptcy.
How can a secured credit card help you?
Reset your credit history. Work seriously on your new financial start by making the monthly payment of your new prepaid credit card bill and, to the extent possible, in its entirety.
In fact, a secured credit card works the same as a traditional credit card, but it requires security funds. These serve as a guarantee and prove that you can now use credit responsibly.
The difference between the secured credit card, the prepaid card and the debit card is that the issuer sends the credit reporting agencies information about your payments.
Once your credit card application has been approved, the issuer will indicate the maximum credit card amount and security funds required. You can not pay your balance using your security fund, but by closing your account, you can recover them.
By doing so, you have the opportunity to restore your credit rating and promote a mortgage (or auto) for two (2) years after the release of your bankruptcy. Indeed, most traditional mortgage lenders will take your efforts into consideration and will be more likely to approve your mortgage application at the posted interest rate or even lower, in order to insure your customer base.
REMINDER: Your credit rating is the dominant factor, prompting some lenders to study your file. These will also take into consideration:
- Your income
- The condition and value of your home
- The loan / value ratio of your home
- Other property and assets you own.
Meet a financial planner to put in place a credit recovery strategy
Have you just finished bankruptcy and want to get off to a good start?
One of the best things to do is make an appointment with a financial planner to set up a credit repair strategy.
Indeed, financial planners know what are the best ways to increase your credit rating and restore confidence in financial institutions.
They can also help you obtain better financing conditions, prepare a budget, make a savings plan and put an action plan in place so that you can achieve your goals and achieve your projects.
The quickest way to recover from bankruptcy is often when one is well surrounded.
The financial planner is an ally who can help you progress faster.
If you wish to obtain the services of such a professional, you can fill out our form and we will send you a free copy
Making a budget can help you regain control of your personal finances – Model Budget
After talking with several specialists in personal finance and credit repair, the tip # 1 that they put forward to help their clients regain control of their finances was. THE BUDGET!
According to them, the budget is the most effective tool for getting people to realize the money they spend, where their cash out goes, what percentage of their income they have in their pockets, and so on.
It is also a motivating tool when integrating a savings plan. Seeing the sums accumulate and when we see how we will have in our savings account in 1-2-3 years, it is more motivating to pay attention and want to save. If you want to make a budget, here we have an easy-to-use template.
You’ve gone bankrupt, hire a financial recovery professional to help you out
Let bankruptcy trustees or financial advisors, mortgage loan submitting partners, support you and guide you to the solution that best suits your financial situation.