A lot of people see bankruptcy as a completely fresh start for their finances.
In many ways, this is the case.
Once you are discharged from bankruptcy, your debts will be wiped clean but your credit score will be impacted.
Bankruptcy will leave a mark on your credit report for a significant amount of time.
With this in mind, you might be wondering how on earth you can start fresh?
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What Do You Need To Know About Your Credit Report?
To understand how bankruptcy is going to impact your credit report, you first need to have a clear grasp of the report itself.
It’s important to be aware that credit reports are completed by profit-seeking businesses.
They are designed to help lenders to determine the level of risk presented by an individual.
They are used to support lenders rather than you.
Furthermore, it’s common to have inaccuracies on a credit report.
You might find that your information with a business will not be reported if that particular business is not connected to the credit report company.
This does include things like landlords and doctors.
How Is It Impacted By Bankruptcy?
Once you have filed for bankruptcy, this will be reported to credit report agencies through the government rather than your trustee.
Once your bankruptcy is complete, this information should also be provided to credit reporters.
It’s possible that there are debts that are listed on your credit report before you filed.
If you want them to be removed, you need to make sure that they are dealt with.
You can deal with them by filing for bankruptcy however some creditors will continue to report them.
This is why you need to make sure that you are checking your credit report every six months after you have been discharged.
That way, you can make sure that things are being reported the right way and there will be no issues that can hurt you in the future.
Usually, a credit report is accurate and provides a clear representation of an individual’s lending history, with major banks as well as credit providers.
When you file for bankruptcy and complete the process your un-secured debts are removed.
If however, you don’t file then these will remain on your credit report.
So, once you file you will be able to start over and rebuild your credit over a number of years.
This isn’t possible while you are still in debt so in some cases bankruptcy really can be the best solution.
Are you interested in learning more about bankruptcy and the benefits that it provides?
At Bankruptcy Canada we are here to help and will work to provide you with the best solution based on your financial situation.
Get in touch today and a friendly member of our team will be happy to assist you.
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