How To Live Life After Bankruptcy?
After bankruptcy, you may enjoy a brand-new start and hurdles. Your credit repute has endured a blow and will remain on your credit record for a couple of years. Creditors and lenders may treat you as a threat and risk due to the past debts that you’ve legally eliminated. Besides, getting a loan might be hard for you; once you do, the charges it cost are punitive.
Moreover, you cannot keep your bankruptcy a secret to creditors and lenders considering the footprints that it has on your record. However, it is possible to build your credit to rebuild your credit and gain the trust of lenders. Given the second chance to gain possible stability of your finances through good money habits should not be wasted. The following pointers will help you avoid undergoing the process of debt relief solutions such as a consumer proposal over again.
Live on a Budget
In Canada, the most rampant causes of bankruptcy are the failure of individuals to stay on budget. If you want to stay out of debt, make sure that you spend on what you need and not on what you want. Moreover, you are to take financial literacy classes prior to a bankruptcy discharge. This will teaches you to manage your expenses and on how to cut cost-efficiently without sacrificing the comfort of living.
Pay Your Bills on Time
To rebuild your credit repute once again, you will have to ensure up to date payments with your bills. Some businesses may pursue to report any unpaid bills to the credit bureaus which will greatly damage your credit. Besides, you need to ensure avoiding unpaid bills. If your salary isn’t enough to cover your expenses, you might need to seek additional income. You can either look for a second job or acquire new skills to fill new roles.
Get a Secured Credit Card
Should you wish to get a standard credit card after your discharge, you still can as other banks provide a secured credit card regardless after bankruptcy. In this case, you will have to put some assets as collateral making your credit secured. Moreover, the value of the asset will be bided with the credit limit granted. The bottom line is to ensure that you are diligent in paying what you owe so creditors or lenders can see that you are capable to pay.
Save All the Money You Can
When undergoing credit counseling, your advisor might push you to secure an emergency fund to save for the rainy days. Making sure that you have some funds available will help you back up your finances at unfortunate times.
Take Out a Small Registered Retirement Savings Plan Loan
You can also rebuild your credit repute through a Registered Retirement Savings Plan Loan. Since you might have a hard time getting for the loan, some banks will be willing to lend you funds for your Registered Retirement Savings Plan through an RRSP loan. In this process, you will have to deposit $1,000 in an RRSP. Then, get for an RRSP loan amounting to $1,000. You will then deposit this amount into your RRSP account as well; this will account for a total of $2,000 in your retirement savings. Getting that amount will accumulate tax savings that you can use to pay your loan.
Avoid Trouble by Avoiding Bankruptcy
To make sure not to stumble on the trap of indebtedness, you need to stay out of the factors that may cause trouble or crisis. Your attitude and lifestyle is a big factor in how you can sustain your needs. Good money habits matter a lot for you to avoid debt solutions such as consumer proposal or debt settlement once again.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.