Life After Bankruptcy – What You Need To Know

What You Need To Know About What Follows Bankruptcy

Bankruptcy may be the right option for those who have large amounts of debt that they are struggling to pay.

Providing it is the right choice for your situation, it can help you to get that fresh financial start you’ve been hoping for.

However, many people worry about life after bankruptcy.

Your life isn’t over once you have filed for bankruptcy.

Your credit score is not ruined forever, and you won’t be shunned by all creditors.

Bankruptcy can be the right step for many to take, but having a realistic expectation for life afterwards is key.

So, what is life after bankruptcy like?

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You will receive a discharge from bankruptcy when you have completed your duties.

Everybody who files for bankruptcy is given bankruptcy duties that they must adhere to.

Once you have received your discharge, this means that you no longer bear any liability for the debts that you owed before you filed for bankruptcy.

Your Licensed Insolvency Trustee will later be discharged when they have filled their own set of duties.

It may take some time for your bankruptcy state to be closed officially.

However, if you have received a discharge then it means your duties are done and that your role in the bankruptcy is over.

What Documents Should You Keep?

You will receive numerous documents throughout your bankruptcy.

It’s important you keep some of these documents for your records.

Keeping them both in physical form and scanning them for the cloud could be a wise idea just in case you ever need to refer back to them or provide them to an external source.

You’ll want to keep your Notice of Bankruptcy, Discharge Certificate, and your Statement of Receipts and Disbursements.

If you lose these documents you can contact your trustee directly or the Office of the Superintendent of Bankruptcy.

Your Credit History And Score

Bankruptcy is not a permanent mark on your credit history, and you can improve your score dramatically in just a few years once bankruptcy is complete.

The majority of people will receive their notice of discharge after 9 months, and it will only show on your credit score for around 6 years after this time.

You can still improve and build your history and credit score in the meantime – you don’t have to wait 6 years for it all to be over.

Make sure you do the following:


  • Check for errors and fix them. Errors on your credit report might sound unlikely but they are more common than you think;
  • Pay all of your bills on time. Your phone bill counts, as do any other monthly bills you must pay. Assume everything will affect your credit report and set up automatic payments so you don’t need to think about transferring money over;
  • Establish new credit – but only if you are at a stage when you can use it well. This may not be a good idea depending on your reasons for bankruptcy.


Establishing New Credit

Understanding the terms and conditions of borrowing is the first step if you are going to establish new credit.

You may not be able to get a good rate, so it might be worth waiting until you can.

If you do decide to take out a new credit card and you’re confident it won’t set you back, then making sure you spend a little and repay it in full each month can help you to build your score back up.

You should not be spending more than you can afford to pay back. Spending a little is the ideal way to keep up with the payments and rebuild your score.

You should be able to get a mortgage from mainstream lenders two years after being discharged from bankruptcy.

However, you may be able to get another lender to do this before two years are up.

The same goes for a car loan.

Just bear in mind that your credit history/score are not the only factors that lenders look at, and they will likely also look at your savings and income to be sure you can pay the money back.

Having a solid budget in place and trying to get some savings behind you could go in your favour.

Your Feelings After Bankruptcy

Many people feel great relief after filing for bankruptcy as they know they are on their way to a fresh financial start.

You will also have learned valuable lessons that can help you in the future.

When you have been discharged from bankruptcy, you will likely breathe a sigh of relief and feel as if a weight has been lifted.

The idea of bankruptcy can be scary, but the majority of people are glad they took this step to a brighter future.

Is Bankruptcy Right For You?

If you haven’t yet filed for bankruptcy, it’s worth looking at all of your options and consulting with a professional.

It’s not a decision that should be taken lightly, and is a last resort for many.

However, it doesn’t mean the end of your credit score forever.

If filing for bankruptcy is right for you it could give you the power to rebuild your credit and financial health and work towards a better future.

There is always life after bankruptcy!

If you’re still unsure what to do, contact Bankruptcy Canada today to learn more about what bankruptcy could mean for you and whether it’s the right choice.

We provide numerous financial services, including credit counseling.

This can provide the financial education you need to move forward with confidence.

There is a solution to suit your unique situation.

We have been helping people from all walks of life for more than 20 years, so get in touch with us to end your financial problems.

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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